10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
Form 10-Q
(Mark One)
[X]   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period endedMarch 31, 2016
Or
[  ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________
Commission file number:  001-08246
Southwestern Energy Company
(Exact name of registrant as specified in its charter)
Delaware		71-0205415
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
10000 Energy Drive Spring, Texas		77389
(Address of principal executive offices)		(Zip Code)
(832) 796-1000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes☒     No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes☒  No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Class		Outstanding as of April 19, 2016
Common Stock, Par Value $0.01		392,666,629

SOUTHWESTERN ENERGY COMPANY
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2016
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Changes in Equity	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
	Results of Operations	29
	Liquidity and Capital Resources	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

All statements, other than historical fact or present financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  All statements that address activities, outcomes and other matters that should or may occur in the future, including, without limitation, statements regarding the financial position, business strategy, production and reserve growth and other plans and objectives for our future operations, are forward-looking statements. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance. We have no obligation and make no undertaking to publicly update or revise any forward-looking statements, except as may be required by law.

Forward-looking statements include the items identified in the preceding paragraph, information concerning possible or assumed future results of operations and other statements in this Quarterly Report on Form 10-Q identified by words such as “anticipate,” “intend,” “plan,” “project,” “estimate,” “continue,” “potential,” “should,” “could,” “may,” “will,” “objective,” “guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “forecast,” “target” or similar words.

You should not place undue reliance on forward-looking statements. They are subject to known and unknown risks, uncertainties and other factors that may affect our operations, markets, products, services and prices and cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with forward-looking statements, risks, uncertainties and factors that could cause our actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

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· the timing and extent of changes in market conditions and prices for natural gas, oil and natural gas liquids (“NGLs”) (including regional basis differentials);

· our ability to fund our planned capital investments;

· a change in our credit rating;

· the extent to which lower commodity prices impact our ability to service or refinance our existing debt;

· the impact of volatility in the financial markets or other global economic factors;

· difficulties in appropriately allocating capital and resources among our strategic opportunities;

· the timing and extent of our success in discovering, developing, producing and estimating reserves;

· our ability to maintain leases that may expire if production is not established or profitability maintained;

· our ability to realize the expected benefits from recent acquisitions;

· difficulties in integrating our operations as a result of any significant acquisitions;

· our ability to transport our production to the most favorable markets or at all;

· the impact of government regulation, including the ability to obtain and maintain permits, any increase in severance or similar taxes, and legislation relating to hydraulic fracturing, climate and over-the-counter derivatives;

· the impact of the adverse outcome of any material litigation against us;

· the effects of weather;

· increased competition and regulation;

· the financial impact of accounting regulations and critical accounting policies;

· the comparative cost of alternative fuels;

· credit risk relating to the risk of loss as a result of non-performance by our counterparties; and

· any other factors listed in the reports we have filed and may file with the Securities and Exchange Commission (“SEC”).

Should one or more of the risks or uncertainties described above or elsewhere in this Quarterly Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. We specifically disclaim all responsibility to publicly update any information contained in a forward-looking statement or any forward-looking statement in its entirety and therefore disclaim any resulting liability for potentially related damages.

All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	For the three months ended
	March 31,
	2016		2015
	(in millions, except share/per share amounts)
Operating Revenues:
Gas sales	$	315	$	625
Oil sales		11		17
NGL sales		17		18
Marketing		198		225
Gas gathering		38		48
		579		933
Operating Costs and Expenses:
Marketing purchases		196		222
Operating expenses		165		155
General and administrative expenses		54		68
Restructuring charges		64		–
Depreciation, depletion and amortization		143		293
Impairment of natural gas and oil properties		1,034		–
Taxes, other than income taxes		23		30
		1,679		768
Operating Income (Loss)		(1,100)		165
Interest Expense:
Interest on debt		53		50
Other interest charges		2		49
Interest capitalized		(41)		(48)
		14		51
Other Loss, Net		(3)		(1)
Gain (Loss) on Derivatives		(14)		14
Income (Loss) Before Income Taxes		(1,131)		127
Provision for Income Taxes:
Deferred		1		49
Net Income (Loss)	$	(1,132)	$	78
Mandatory convertible preferred stock dividend		27		25
Participating securities - mandatory convertible preferred stock		–		7
Net Income (Loss) Attributable to Common Stock	$	(1,159)	$	46
Earnings (Loss) Per Common Share:
Basic	$	(3.03)	$	0.12
Diluted	$	(3.03)	$	0.12
Weighted Average Common Shares Outstanding:
Basic		382,870,847		375,444,030
Diluted		382,870,847		375,578,054

The accompanying notes are an integral part of these

unauditedcondensed consolidated financial statements.

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SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
	For the three months ended
	March 31,
	2016		2015
	(in millions)
Net income (loss)	$	(1,132)	$	78
Change in derivatives:
Settlements (1)		–		(25)
Change in fair value of derivative instruments (2)		–		17
Total change in derivatives		–		(8)
Change in value of pension and other postretirement liabilities:
Amortization of prior service cost and net loss included in net periodic pension cost (3)		1		–
Change in currency translation adjustment		3		(6)
Comprehensive income (loss)	$	(1,128)	$	64

(1) Net of ($17) million in taxes for the three months ended March 31, 2015. 

(2) Net of $7 million in taxes for the three months ended March 31, 2015.

(3) Net of $1 million in taxes for the three months ended March 31, 2016.

The accompanying notes are an integral part of these

unauditedcondensed consolidated financial statements.

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SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
	March 31,		December 31,
	2016		2015
ASSETS	(in millions)
Current assets:
Cash and cash equivalents	$	1,597	$	15
Accounts receivable, net		224		327
Derivative assets		35		3
Other current assets		28		48
Total current assets		1,884		393
Natural gas and oil properties, using the full cost method, including $3,505 millionas of March 31, 2016 and $3,727  million as of December 31, 2015 excluded from amortization		22,610		22,478
Gathering systems		1,281		1,280
Other		602		606
Less: Accumulated depreciation, depletion and amortization		(18,002)		(16,821)
Total property and equipment, net		6,491		7,543
Other long-term assets		143		150
TOTAL ASSETS	$	8,518	$	8,086
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	1	$	1
Accounts payable		346		513
Taxes payable		52		64
Interest payable		32		75
Dividends payable		27		27
Derivative liabilities		8		3
Other current liabilities		12		24
Total current liabilities		478		707
Long-term debt		6,442		4,704
Deferred income taxes		2		–
Pension and other postretirement liabilities		50		50
Other long-term liabilities		398		343
Total long-term liabilities		6,892		5,097
Commitments and contingencies (Note 11)
Equity:
Common stock, $0.01 par value; 1,250,000,000 shares authorized;  issued 389,673,678shares as of March 31, 2016(does not include 3,024,737 shares declared as a stock dividend on March 16, 2016 and issued on April 15, 2016)  and 390,138,549 as of December 31, 2015		4		4
Preferred stock, $0.01 par value, 10,000,000 shares authorized, 6.25% Series B Mandatory Convertible, $1,000 per share liquidation preference, 1,725,000shares issued and outstanding as of March 31, 2016 and December 31, 2015, conversion in January 2018		–		–
Additional paid-in capital		3,403		3,409
Accumulated deficit		(2,214)		(1,082)
Accumulated other comprehensive loss		(44)		(48)
Common stock in treasury, 31,269shares as of March 31, 2016 and 47,149 shares as ofDecember 31, 2015, respectively		(1)		(1)
Total equity		1,148		2,282
TOTAL LIABILITIES AND EQUITY	$	8,518	$	8,086
The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

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SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the three months ended
	March 31,
	2016		2015
	(in millions)
Cash Flows From Operating Activities
Net income (loss)	$	(1,132)	$	78
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		143		293
Impairment of natural gas and oil properties		1,034		–
Amortization of debt issuance costs		2		46
Deferred income taxes		1		49
Loss on derivatives, net of settlement		21		21
Stock-based compensation		9		6
Restructuring charges		42		–
Other		5		–
Change in assets and liabilities:
Accounts receivable		103		38
Accounts payable		(124)		(35)
Taxes payable		(12)		(20)
Interest payable		(11)		(1)
Other assets and liabilities		11		66
Net cash provided by operating activities		92		541
Cash Flows From Investing Activities
Capital investments		(196)		(508)
Acquisitions		–		(591)
Proceeds from sale of property and equipment		–		1
Other		–		3
Net cash used in investing activities		(196)		(1,095)
Cash Flows From Financing Activities
Payments on short-term debt		–		(4,500)
Payments on revolving credit facility		(864)		(830)
Borrowings under revolving credit facility		2,600		1,330
Payments on commercial paper		(242)		–
Borrowings under commercial paper		242		–
Change in bank drafts outstanding		(19)		(7)
Proceeds from issuance of long-term debt		–		2,200
Debt issuance costs		–		(17)
Proceeds from issuance of common stock		–		669
Proceeds from issuance of mandatory convertible preferred stock		–		1,673
Preferred stock dividend		(27)		–
Other		(4)		–
Net cash provided by financing activities		1,686		518
Increase (decrease) in cash and cash equivalents		1,582		(36)
Cash and cash equivalents at beginning of year		15		53
Cash and cash equivalents at end of period	$	1,597	$	17

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

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SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

Common Stock

Preferred Stock

Shares Issued

Amount

Shares

Additional Paid-In Capital

Accumulated Deficit

Accumulated Other Comprehensive Income (Loss)

Common Stock in Treasury

Total

(in millions, except share amounts)

Balance at December 31, 2015

390,138,549

$

4

1,725,000

$

3,409

$

(1,082)

$

(48)

$

(1)

$

2,282

Comprehensive loss:

Net loss

–

–

–

–

(1,132)

–

–

(1,132)

Other comprehensive income

–

–

–

–

–

4

–

4

Total comprehensive loss

–

–

–

–

–

–

–

(1,128)

Stock-based compensation

–

–

–

26

–

–

–

26

Preferred stock dividend

–

–

–

(27)

–

–

–

(27)

Issuance of restricted stock

84,165

–

–

–

–

–

–

–

Cancellation of restricted stock

(24,333)

–

–

–

–

–

–

–

Tax withholding – stock compensation

(524,703)

–

–

(5)

–

–

–

(5)

Balance at March 31, 2016

389,673,678

$

4

1,725,000

$

3,403

$

(2,214)

$

(44)

$

(1)

$

1,148

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

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SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

Southwestern Energy Company (including its subsidiaries, collectively “Southwestern” or the “Company”) is an independent energy company engaged in natural gas and oil exploration, development and production (“E&P”). The Company’s current operations are principally focused within the United States on the development of unconventional reservoirs located in Pennsylvania, West Virginia and Arkansas.  

The Company’s operations in northeast Pennsylvania are primarily focused on the unconventional natural gas reservoir known as the Marcellus Shale (herein referred to as “Northeast Appalachia”), its operations in West Virginia and southwest Pennsylvania are focused on the Marcellus Shale, the Utica and the Upper Devonian unconventional natural gas and oil reservoirs (herein referred to as “Southwest Appalachia”) and its operations in Arkansas are primarily focused on an unconventional natural gas reservoir known as the Fayetteville Shale. Collectively, the Company’s properties located in Pennsylvania and West Virginia are herein referred to as the “Appalachian Basin.”  The Company also actively seeks to find and develop new natural gas and oil plays with significant exploration and exploitation potential, which it refers to as “New Ventures,” and has exploration and production activities ongoing in Colorado and Louisiana, along with other areas in which it is currently exploring for new development opportunities.  The Company also has drilling rigs in Pennsylvania, West Virginia and Arkansas, as well as in other operating areas, and provides oilfield products and services, principally serving its exploration and production operations. Southwestern’s natural gas gathering and marketing (“Midstream Services”) activities primarily support the Company’s E&P activities in Arkansas, Pennsylvania, Louisiana and West Virginia.  

The accompanying unaudited condensed consolidated financial statements were prepared using accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information relating to the Company’s organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been appropriately condensed or omitted in this Quarterly Report. The Company believes the disclosures made are adequate to make the information presented not misleading.

The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented herein. It is recommended that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report for the year ended December 31, 2015 (“2015 Annual Report”).

The Company’s significant accounting policies, which have been reviewed and approved by the Audit Committee of the Company’s Board of Directors, are summarized in Note 1 in the Notes to the Consolidated Financial Statements included in the Company’s 2015 Annual Report.

Certain reclassifications have been made to the prior year financial statements to conform to the 2016 presentation.  The effects of the reclassifications were not material to the Company’s unaudited condensed consolidated financial statements.

(2)  CASH AND CASH EQUIVALENTS

The following table presents a summary of Cash and cash equivalents as of March 31, 2016 and December 31, 2015:

	March 31,		December 31,
	2016		2015
		(in millions)
Cash	$	57	$	15
Marketable securities		1,540		–
Total cash and cash equivalents	$	1,597	$	15

On March 30, 2016, the Company borrowed $1.55 billion on its revolving credit facility with the proceeds invested in marketable securities.  The $1.55 billion borrowing was repaid on April 1, 2016.  For related discussion see Note 10 to the unaudited condensed consolidated financial statements included in this Quarterly Report.

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(3) REDUCTION IN WORKFORCE

In January 2016, the Company announced a 40% workforce reduction of approximately 1,100 employees as a result of lower anticipated drilling activity.  This reduction was substantially complete as of March 31, 2016.  The following table presents a summary of the restructuring charges for the three months ended March 31, 2016:

	For the three months
	ended March 31, 2016
	(in millions)
Severance (including payroll taxes)	$	42
Stock-based compensation		18
Benefits		3
Outplacement services, other		1
Total restructuring charges (1)	$	64

(1) Total restructuring charges were $61 million and $3 million for the Company’s E&P and Midstream segments, respectively.

As of March 31, 2016, the Company recorded a liability of $24 million for severance payments (including payroll taxes) which is reflected in accounts payable on the condensed consolidated balance sheets.  A substantial portion of this liability will be paid in April 2016.

(4) ACQUISITIONS AND DIVESTITURES

In May 2015, the Company sold conventional oil and gas assets located in East Texas and the Arkoma Basin for approximately $211 million. The net book value of these assets was primarily in the full cost pool and was held in the E&P segment as of the closing date.  The proceeds from the transaction were used to reduce the Company’s debt.  Approximately $205 million of the proceeds received were recorded as a reduction of the capitalized costs of the Company’s natural gas and oil properties in the United States pursuant to the full cost method of accounting.

In April 2015, the Company sold its gathering assets located in Bradford and Lycoming counties in northeast Pennsylvania to Howard Midstream Energy Partners, LLC for an adjusted sales price of approximately $489 million.  The net book value of these assets was $206 million and was held in the Midstream segment as of the closing date.  A gain on sale of $283 million was recognized and is included in gain on sale of assets, net on the unaudited condensed consolidated statement of operations.  The assets include approximately 100 miles of natural gas gathering pipelines, with nearly 600 million cubic feet per day of capacity. The proceeds from the transaction were used to substantially repay borrowings under the Company’s $500 million term loan facility that would have matured in December 2016.

In January 2015, the Company completed an acquisition of certain natural gas and oil assets including approximately 46,700 net acres in northeast Pennsylvania from WPX Energy, Inc. for an adjusted purchase price of $270 million (the “WPX Property Acquisition”). This acreage was producing approximately 50 million net cubic feet of gas per day from 63 operated horizontal wells as of December 2014. As part of this transaction, the Company assumed firm transportation capacity of 260 million cubic feet of gas per day predominantly on the Millennium pipeline. The firm transport is being amortized over 19 years. As of March 31, 2016 and December 31, 2015 the Company has amortized $10 million and $8 million, respectively. This transaction was funded with the revolving credit facility and was accounted for as a business combination.

In January 2015, the Company completed an acquisition in which the Company’s subsidiary acquired certain natural gas and oil assets from Statoil ASA covering approximately 30,000 acres in West Virginia and southwest Pennsylvania comprising approximately 20% of Statoil’s interests in that acreage for $357 million, (the “Statoil Property Acquisition”). All of these assets are also assets in which the Company has acquired interests under the Chesapeake Property Acquisition, as defined below. This transaction was funded with the revolving credit facility and was accounted for as a business combination. The Company allocated approximately $357 million of the purchase price to natural gas and oil properties, based on the respective fair values of the assets acquired.

In December 2014, the Company completed an acquisition of certain oil and gas assets from Chesapeake Energy Corporation covering approximately 413,000 net acres in West Virginia and southwest Pennsylvania targeting natural gas, natural gas liquids (“NGLs”) and crude oil contained in the Upper Devonian, Marcellus and Utica Shales for approximately $5.0 billion (the “Chesapeake Property Acquisition”). The transaction was temporarily financed using a $4.5 billion 364-day senior unsecured bridge term loan credit facility and a $500 million two-year unsecured term loan.  The Company repaid all principal and interest outstanding on the $4.5 billion bridge facility in January 2015 after permanent financing was finalized and, as a result, expensed $47 million of short-term unamortized debt issuance costs related to the bridge facility in January 2015 recognized in other interest charges on the unaudited condensed consolidated

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statement of operations. The term loan facility was repaid in full in April 2015 with proceeds from the divestiture of the Company’s northeastern Pennsylvania gathering assets and borrowings under the revolving credit facility.

(5) NATURAL GAS AND OIL PROPERTIES

The Company utilizes the full cost method of accounting for costs related to the exploration, development and acquisition of natural gas and oil properties.  Under this method, all such costs (productive and nonproductive), including salaries, benefits and other internal costs directly attributable to these activities are capitalized on a country-by-country basis and amortized over the estimated lives of the properties using the units-of-production method. These capitalized costsare subject to a ceiling test that limits such pooled costs, net of applicable deferred taxes, to the aggregate of the present value of future net revenues attributable to proved natural gas, oil and NGL reserves discounted at 10%  (standardized measure) plus the lower of cost or market value of unproved properties. Any costs in excess of the ceiling are written off as a non-cash expense. The expense may not be reversed in future periods, even though higher natural gas, oil and NGL prices may subsequently increase the ceiling. Companies using the full cost method are required to use the average quoted price from the first day of each month from the previous 12 months, including the impact of derivatives qualifying as cash flow hedges, to calculate the ceiling value of their reserves.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $2.40 per MMBtu, West Texas Intermediate oil of $42.77 per barrel and NGLs of $5.76 per barrel, adjusted for market differentials, the Company’s net book value of its United States natural gas and oil properties exceeded the ceiling by $641 million(net of tax) at March 31, 2016 and resulted in a non-cash ceiling test impairment. The Company had no hedge positions accounted for as cash flow hedges as of March 31, 2016. Decreases in market prices as well as changes in production rates, levels of reserves, evaluation of costs excluded from amortization, future development costs and production costs could result in future ceiling test impairments.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $3.88 per MMBtu, West Texas Intermediate oil of $79.21 per barrel and NGLs of $16.38 per barrel, adjusted for market differentials, the net book value of the Company’s United States natural gas and oil properties did not exceed the ceiling amount and did not result in a ceiling test impairment at March 31, 2015. Cash flow hedges of natural gas production in place increased the ceiling amount by approximately $45 million as of March 31, 2015.In the second, third and fourth quarters of 2015, the Company’s net book value of its United States natural gas and oil properties exceeded the ceiling by approximately $944 million (net of tax) at June 30, 2015, $1,746 million (net of tax) at September 30, 2015 and $1,586 million (net of tax) at December 31, 2015,resulting in non-cash ceiling test impairments in each quarter.

(6) EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income (loss) attributable to common stock by the weighted average number of common shares outstanding during the reportable period.  The diluted earnings per share calculation adds to the weighted average number of common shares outstanding: the incremental shares that would have been outstanding assuming the exercise of dilutive stock options, the vesting of unvested restricted shares of common stock and performance units and the assumed conversion of mandatory convertible preferred stock. An antidilutive impact is an increase in earnings per share or a reduction in net loss per share resulting from the conversion, exercise, or contingent issuance of certain securities.

In January 2015, the Company completed concurrent underwritten public offerings of 30,000,000 shares of its common stock and 34,500,000 depositary shares (both share counts include shares issued as a result of the underwriters exercising their options to purchase additional shares). The common stock offering was priced at $23.00 per share. Net proceeds, after underwriting discount and expenses, from the common stock offering were approximately $669 million. Net proceeds, after underwriting discount and expenses, from the depositary share offering were approximately $1.7 billion. Each depositary share represents a 1/20th interest in a share of the Company’s mandatory convertible preferred stock, with a liquidation preference of $1,000 per share (equivalent to a $50 liquidation preference per depositary share). The proceeds from the offerings were used to partially repay borrowings under the Company’s $4.5 billion 364-day bridge facility with the remaining balance of the bridge facility fully repaid with proceeds from the Company’s January 2015 public offering of $2.2 billion in long-term senior notes.

The mandatory convertible preferred stock entitles the holder to a proportional fractional interest in the rights and preferences of the convertible preferred stock, including conversion, dividend, liquidation and voting rights. Unless converted earlier at the option of the holders, on or around January 15, 2018 each share of convertible preferred stock will automatically convert into between 37.0028 and 43.4782 shares of the Company’s common stock (and, correspondingly, each depositary share will convert into between 1.85014 and 2.17391 shares of the Company’s common stock), subject

10

to customary anti-dilution adjustments, depending on the volume-weighted average price of the Company’s common stock over a 20 trading day averaging period immediately prior to that date.

The mandatory convertible preferred stock has the non-forfeitable right to participate on an as-converted basis at the conversion rate then in effect in any common stock dividends declared and as such, is considered a participating security.  Accordingly, it is included in the computation of basic and diluted earnings per share, pursuant to the two-class method. In the calculation of basic earnings per share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company’s participating securities do not participate in undistributed net losses because they are not contractually obligated to do so.

On March 16, 2016, the Company declared its quarterly dividend, payable to holders of the mandatory convertible preferred stock, and announced that it would pay the dividend in common stock, in lieu of cash, to the extent permitted by the certificate of designations for the Series B preferred stock.  The Company issued 3,024,737shares of common stock on April 15, 2016 in payment of the dividend.

The following table presents the computation of earnings per share for the three months ended March 31, 2016 and 2015:

	For the three months ended
	March 31,
	2016		2015
	(in millions, except share/per share amounts)
Net income (loss)	$	(1,132)	$	78
Mandatory convertible preferred stock dividend		27		25
Net income (loss) attributable to shareholders		(1,159)		53
Participating securities - mandatory convertible preferred stock		–		7
Net income (loss) attributable to common stock	$	(1,159)	$	46
Number of common shares:
Weighted average outstanding		382,870,847		375,444,030
Issued upon assumed exercise of outstanding stock options (1)		–		–
Effect of issuance of non-vested restricted common stock (2)		–		133,634
Effect of issuance of non-vested performance units (3)		–		390
Effect of issuance of mandatory convertible preferred stock (4)		–		–
Effect of declaration of preferred stock dividends (5)		–		–
Weighted average and potential dilutive outstanding		382,870,847		375,578,054
Earnings (loss) per common share:
Basic	$	($3.03)	$	0.12
Diluted	$	($3.03)	$	0.12

(1) Due to the net loss for the three months ended March 31, 2016, the unvested stock options were not recognized in diluted earnings per share calculations as they would be antidilutive. Options for 5,732,521 shares and 3,704,089 shares were excluded from the calculation of diluted shares for the three months ended March 31, 2016 and 2015, respectively, because they would have had an antidilutive effect.

(2) Due to the net loss for the three months ended March 31, 2016, the unvested share-based payments were not recognized in diluted earnings per share calculations as they would be antidilutive.  The calculation excluded5,779,820 sharesand1,916,645 shares of restricted stock for the three months ended March 31, 2016 and 2015, respectively, because they would have had an antidilutive effect.

(3) For the three months ended March 31, 2016, 297,297 shares of performance units were excluded from the calculation of diluted earnings per share as they would be antidilutive.

(4) For the three months ended March 31, 2016 and 2015, 74,999,895 and 58,333,252, respectively, of weighted average common shares issuable upon the assumed conversion of the mandatory convertible preferred stock were excluded from the diluted earnings per share calculation as they would be antidilutive.

(5) Due to the net loss for the three months ended March 31, 2016, 3,024,737 shares ofcommon stockdeclared as preferred stock dividends were excluded from the diluted earnings per share calculations as they would have had an antidilutive effect.

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(7) DERIVATIVES AND RISK MANAGEMENT

The Company is exposed to volatility in market prices and basis differentials for natural gas, oil and NGLs which impacts the predictability of its cash flows related to the sale of those commodities.  These risks are managed by the Company’s use of certain derivative financial instruments.  As of March 31, 2016, the Company’s derivative financial instruments consisted of fixed price swaps, sold call options, purchased put options and interest rate swaps.  The Company also had basis swaps and sold call options as of December 31, 2015.  The basis swaps settled in the first quarter of 2016. A description of the Company’s derivative financial instruments is provided below:

Fixed price swaps	The Company receives a fixed price for the contract and pays a floating market price to the counterparty.
Sold call options	The Company sells call options in exchange for a premium.  If the market price exceeds the strike price of the call option  at the time of settlement, the Company pays the counterparty such excess on sold call options. If the market price settles below the call’s strike price, no payment is due from either party.
Purchased put options	The Company purchases put options from the counterparty by payment of a cash premium.  If the market price is lower than the put’s strike price at the time of settlement, the Company receives from the counterparty such difference on purchased put options.  If the market price settles above the put’s strike price, no payment is due from either party.
Basis swaps	Arrangements that guarantee a price differential for natural gas from a specified delivery point.  The Company receives a payment from the counterparty if the price differential is greater than the stated terms of the contract and pays the counterparty if the price differential is less than the stated terms of the contract.
Interest rate swaps	Interest rate swaps are used to fix or float interest rates on existing or anticipated indebtedness. The purpose of these instruments is to manage the Company’s existing or anticipated exposure to unfavorable interest rate changes.

The Company utilizes counterparties for its derivative instruments that it believes are credit-worthy at the time the transactions are entered into and the Company closely monitors the credit ratings of these counterparties. Additionally, the Company performs both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. However, the events in the financial markets in recent years demonstrate there can be no assurance that a counterparty will be able to meet its obligations to the Company.

The following table provides information about the Company’s financial instruments that are sensitive to changes in commodity prices and that are used to protect the Company’s exposure.  None of the financial instruments below are designated for hedge accounting treatment.  The table presents the notional amount in Bcf, the weighted average contract prices and the fair value by expected maturity dates as of March 31, 2016.

		Weighted Average Price per MMBtu
	Volume (Bcf)	Swaps		Purchased Puts		Sold Calls		Fair value at March 31, 2016 ($ in millions)
Natural Gas:
Fixed Price Swaps:
2016	64	$	2.48	$	–	$	–	$	20
Purchased Put Options:
2016	43	$	–	$	2.35	$	–	$	15
Sold Call Options:
2016	90	$	–	$	–	$	5.00	$	–
2017	86	$	–	$	–	$	3.25	$	(16)
2018	63	$	–	$	–	$	3.50	$	(12)
2019	52	$	–	$	–	$	3.50	$	(13)
2020	32	$	–	$	–	$	3.75	$	(9)

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The balance sheet classification of the assets related to derivative financial instruments (none of which are designated for hedge accounting) are summarized below as of March  31, 2016  and December 31, 2015:

	Derivative Assets
	Balance Sheet Classification		Fair Value
			March 31, 2016		December 31, 2015
		(in millions)
Basis swaps	Derivative assets		$	–	$	3
Fixed price swaps	Derivative assets			20		–
Purchased put options	Derivative assets			15		–
Total derivative assets			$	35	$	3
	Derivative Liabilities
	Balance Sheet Classification		Fair Value
			March 31, 2016		December 31, 2015
			(in millions)
Sold call options	Derivative liabilities		$	5	$	–
Interest rate swaps	Derivative liabilities			3		3
Sold call options	Other long-term liabilities			45		–
Interest rate swaps	Other long-term liabilities			5		2
Total derivative liabilities			$	58	$	5

At March 31, 2016, the net fair value of the Company’s financial instruments related to natural gas was a  $15 millionliability.  The net fair value of the Company’s interest rate swaps was an $8 million liability at March 31, 2016.

Derivative Contracts not Designated for Hedge Accounting

As of March 31, 2016, the Company did not have any positions designated for hedge accounting treatment.  Gains and losses on derivatives that are not designated for hedge accounting treatment, or that do not meet hedge accounting requirements, are recorded as a component of gain (loss) on derivatives on the condensed consolidated statements of operations.   Accordingly, the gain (loss) on derivatives component of the statements of operations reflects the gains and losses on both settled and unsettled derivatives. The Company calculates gains and losses on settled derivatives as the summation of gains and losses on positions which have settled within the reporting period.  Only the settled gains and losses are included in the Company’s realized commodity price calculations.

The Company is a party to interest rate swaps that were entered into to mitigate the Company’s exposure to volatility in interest rates. The interest rate swaps have a notional amount of $170 million and expire in June 2020.The Company did not designate the interest rate swaps for hedge accounting.  Changes in the fair value of the interest rate swaps are included in gain (loss) on derivatives in the unaudited condensed consolidated statements of operations.

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The following tables summarize the before tax effect of fixed price swaps, basis swaps, sold call options, purchased put options and interest rate swaps not designated for hedge accounting on the unaudited condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015:

		Gain (Loss) on Derivatives,
		Unsettled
		Recognized in Earnings
	Consolidated Statement of Operations	For the three months ended
	Classification of Gain (Loss) on	March 31,
Derivative Instrument	Derivatives, Unsettled	2016		2015
		(in millions)
Basis swaps	Gain (Loss) on Derivatives	$	(3)	$	(8)
Sold call options	Gain (Loss) on Derivatives		(50)		8
Purchased put options	Gain (Loss) on Derivatives		15		–
Fixed price swaps	Gain (Loss) on Derivatives		20		(18)
Interest rate swaps	Gain (Loss) on Derivatives		(3)		(3)
Total loss on unsettled derivatives		$	(21)	$	(21)
		Gain (Loss)
		on Derivatives, Settled (1)
		Recognized in Earnings
	Consolidated Statement of Operations	For the three months ended
	Classification of Gain (Loss)	March 31,
Derivative Instrument	on Derivatives, Settled (1)	2016		2015
		(in millions)
Basis swaps	Gain (Loss) on Derivatives	$	4	$	(6)
Fixed price swaps	Gain (Loss) on Derivatives		4		42
Interest rate swaps	Gain (Loss) on Derivatives		(1)		(1)
Total gain on settled derivatives (2)		$	7	$	35
Total gain (loss) on derivatives		$	(14)	$	14

(1) The Company calculates gain (loss) on derivatives, settled, as the summation of gains and losses on positions that have settled within the period.

(2) These amounts are included, along with gas sales revenues, in the calculation of the Company’s realized natural gas price.

Derivative Contracts Designated for Hedge Accounting

All derivatives are recognized in the balance sheet as either an asset or liability and are measured at fair value other than transactions for which normal purchase/normal sale is applied. Certain criteria must be satisfied in order for derivative financial instruments to be designated for hedge accounting.  Accounting guidance for qualifying hedges allows an unsettled derivative’s unrealized gains and losses to be recorded either in earnings or as a component of other comprehensive income until settled.  In the period of settlement, the Company recognizes the gains and losses from these qualifying hedges in operating revenues.  In 2015, the Company had certain fixed price swaps that were designated for hedge accounting.  For the three months ended March 31, 2015, the Company reported a gain in other comprehensive income of $24 million (pre-tax) related to the effective portion of our unsettled fixed price swaps.  The ineffective portion of those fixed price swaps was recognized in earnings and had an inconsequential impact to the unaudited condensed consolidated statement of operations for the three ended March 31, 2015.  During the first quarter of 2015, a gain of $42 million (pre-tax) on settled fixed price swaps was transferred from other comprehensive income into gas sales revenues in the consolidated statements of operations.  As of March 31, 2016, the Company did not have any positions designated for hedge accounting treatment.

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(8) RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME

The following tables detail the components of accumulated other comprehensive income (loss) and the related tax effects for the three months ended March  31, 2016:

	For the three months ended
	March 31, 2016
	Pension and Other Postretirement		Foreign Currency		Total
	(in millions) (1)
Beginning balance at December 31, 2015	$	(25)	$	(23)	$	(48)
Other comprehensive income before reclassifications		–		3		3
Amounts reclassified from other comprehensive income (loss) (2)		1		–		1
Net current-period other comprehensive loss		1		3		4
Ending balance at March 31, 2016	$	(24)	$	(20)	$	(44)

(1) All amounts are net of tax.

(2) See separate table below for details about these reclassifications.

Details about Accumulated Other Comprehensive Income	Affected Line Item in the Consolidated Statement of Operations		Amount Reclassified from Accumulated Other Comprehensive Income
			For the three months ended March 31, 2016
			(in millions)
Pension and other postretirement
Amortization of prior service cost and net loss (1)	General and administrative expenses	$	2
	Provision for income taxes		1
Total reclassifications for the period	Net loss	$	1

(1) See Note 12 for additional details regarding the Company’s retirement and employee benefit plans.

(9) FAIR VALUE MEASUREMENTS

The carrying amounts and estimated fair values of the Company’s financial instruments as of March  31, 2016 and December 31, 2015 were as follows:

	March 31, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(in millions)
Cash and cash equivalents	$	1,597	$	1,597	$	15	$	15
Credit facility		1,852		1,852		116		116
Term loan facility		748		748		747		747
Senior notes		3,843		2,729		3,842		2,651
Derivative instruments, net		(23)		(23)		(2)		(2)

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, other current assets and current liabilities on the unaudited condensed consolidated balance sheets approximate fair value because of their short-term nature. For debt and derivative instruments, the following methods and assumptions were used to estimate fair value:

Debt: The fair values of the Company’s senior notes were based on the market value of the Company’s publicly traded debt as determined based on the yield of the Company’s senior notes.

The carrying values of the borrowings under the Company’s unsecured revolving credit and term loan facilities approximate fair value because the interest rate is variable and reflective of market rates. The Company considers the fair value of its debt to be a Level 2 measurement on the fair value hierarchy. 

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Derivative Instruments:The fair value of all derivative instruments is the amount at which the instrument could be exchanged currently between willing parties. The amounts are based on quoted market prices, best estimates obtained from counterparties and an option pricing model, when necessary, for price option contracts.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:

Level 1 valuations - Consist of unadjusted quoted prices in active markets for identical assets and liabilities and have the highest priority.

Level 2 valuations - Consist of quoted market information for the calculation of fair market value.

Level 3 valuations - Consist of internal estimates and have the lowest priority.

The Company has classified its derivatives into these levels depending upon the data utilized to determine their fair values. The Company’s fixed price swaps (Level 2) are estimated using third-party discounted cash flow calculations using the NYMEX futures index. The Company utilized discounted cash flow models for valuing its interest rate derivatives (Level 2). The net derivative values attributable to the Company's interest rate derivative contracts as of March 31, 2016 are based on (i) the contracted notional amounts, (ii) active market-quoted London Interbank Offered Rate (“LIBOR”) yield curves and (iii) the applicable credit-adjusted risk-free rate yield curve. The Company’s sold call options and purchased put options (Level 3) are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contract terms, including maturity, and market parameters, including assumptions of the NYMEX futures index, interest rates, volatility and credit worthiness.  The Company’s basis swaps (Level 3) are estimated using third-party calculations based upon forward commodity price curves.

Inputs to the Black-Scholes model, including the volatility input, which is the significant unobservable input for Level 3 fair value measurements, are obtained from a third-party pricing source, with independent verification of the most significant inputs on a monthly basis. An increase (decrease) in volatility would result in an increase (decrease) in fair value measurement, respectively. However, such changes would not have a significant impact.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in millions):

	March 31, 2016
	Fair Value Measurements Using:
	Quoted Prices		Significant		Significant
	in Active		Other		Unobservable
	Markets		Observable Inputs		Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Fixed price swap assets	$	–	$	20	$	–	$	20
Purchased put option assets		–		–		15		15
Interest rate swap liabilities		–		(8)		–		(8)
Sold call option liabilities		–		–		(50)		(50)
Total	$	–	$	12	$	(35)	$	(23)
	December 31, 2015
	Fair Value Measurements Using:
	Quoted Prices		Significant		Significant
	in Active		Other		Unobservable
	Markets		Observable Inputs		Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Basis swap assets	$	–	$	–	$	3	$	3
Interest rate swap liabilities		–		(5)		–		(5)
Total	$	–	$	(5)	$	3	$	(2)

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The table below presents reconciliations for the change in net fair value of derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March  31, 2016 and 2015.  The fair values of Level 3 derivative instruments are estimated using proprietary valuation models that utilize both market observable and unobservable parameters. Level 3 instruments presented in the table consist of net derivatives valued using pricing models incorporating assumptions that, in the Company’s judgment, reflect reasonable assumptions a marketplace participant would have used as of March  31, 2016 and 2015.

	For the three months ended
	March 31,
	2016		2015
	(in millions)
Balance at beginning of period	$	3	$	(8)
Total gains (losses):
Included in earnings		(34)		(6)
Purchases, issuances, and settlements:
Settlements		(4)		6
Transfers into/out of Level 3		–		–
Balance at end of period	$	(35)	$	(8)
Change in losses included in earnings relating to derivatives still held as of March 31	$	(38)	$	–

(10) DEBT

The components of debt as of March 31, 2016  and December 31, 2015 consisted of the following:

		March 31, 2016
		(in millions)
	Debt Instrument		Unamortized Issuance Cost		Unamortized Debt Discount		Total
Short-term debt:
7.15% Senior Notes due May 2018	$	1	$	–	$	–	$	1
Total short-term debt	$	1	$	–	$	–	$	1
Long-term debt:
Variable rate (4.154% at March 31, 2016) credit facility, expires December 2018		1,852		–		–		1,852
Variable rate (2.025% at March 31, 2016) term loan facility, due November 2018		750		(2)		–		748
7.35% Senior Notes due October 2017		15		–		–		15
7.125% Senior Notes due October 2017		25		–		–		25
3.3% Senior Notes due January 2018		350		(2)		–		348
7.5% Senior Notes due February 2018		600		(2)		–		598
7.15% Senior Notes due May 2018		26		–		–		26
4.05% Senior Notes due January 2020		850		(5)		–		845
4.10% Senior Notes due March 2022		1,000		(5)		(1)		994
4.95% Senior Notes due January 2025		1,000		(7)		(2)		991
Total long-term debt	$	6,468	$	(23)	$	(3)	$	6,442
Total debt	$	6,469	$	(23)	$	(3)	$	6,443

17

		December 31, 2015
		(in millions)
	Debt Instrument		Unamortized Issuance Cost		Unamortized Debt Discount		Total
Short-term debt:
7.15% Senior Notes due May 2018	$	1	$	–	$	–	$	1
Total short-term debt	$	1	$	–	$	–	$	1
Long-term debt:
Variable rate (1.886% at December 31, 2015) credit facility, expires December 2018		116		–		–		116
Variable rate (1.775% at December 31, 2015) term loan facility, due November 2018		750		(3)		–		747
7.35% Senior Notes due October 2017		15		–		–		15
7.125% Senior Notes due October 2017		25		–		–		25
3.3% Senior Notes due January 2018		350		(2)		–		348
7.5% Senior Notes due February 2018		600		(2)		–		598
7.15% Senior Notes due May 2018		26		–		–		26
4.05% Senior Notes due January 2020		850		(5)		(1)		844
4.10% Senior Notes due March 2022		1,000		(5)		(1)		994
4.95% Senior Notes due January 2025		1,000		(7)		(2)		991
Total long-term debt	$	4,732	$	(24)	$	(4)	$	4,704
Total debt	$	4,733	$	(24)	$	(4)	$	4,705

Credit Facility

The Company’s revolving credit facility entered into in December 2013, provides a borrowing capacity ofup to $2.0 billion, reduced for any outstanding letters of credit, and matures inDecember 2018,with options for twoone-year extensions with participating lender approval.  The Company had $148 million of letters of credit outstanding as of March 31, 2016.  The borrowing capacity available under the revolving credit facility may be increased by  $500  million upon the Company’s agreement with its participating lenders. The interest rate on the revolving credit facility is calculated based upon the Company’s public debt ratings from Standard & Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”) and was 200.0 basis points over LIBOR as of March 31, 2016.  Since the adjustment ceiling per the terms of the revolving credit facility is 200.0 basis points, the interest rate sensitivity on the Company’s revolving credit facility currently correlates directly to changes in LIBOR.  On March 30, 2016, the Company borrowed $1.55 billion on the revolving credit facility.  On April 1, 2016, the Company repaid the $1.55 billion borrowingin full.  As of March 31, 2016, the Company had $1.9  billion drawn on the credit facility and $0.1 billion in letters of credit.

The revolving credit facility and the term loan facility are unsecured and are not guaranteed by any subsidiaries of the Company.  The revolving credit facility and the term loan facility contain covenants imposing certain restrictions on the Company, including a financial covenant under which Southwestern may not issue total debt in excess of 60% of its total adjusted book capital. This financial covenant with respect to capitalization percentages excludes the effects of any full cost ceiling impairments, certain hedging activities, unamortized issuance cost, unamortized debt discount and the Company’s pension and other postretirement liabilities.  As of March 31, 2016, the Company’s adjusted capital structure was 45% debt and 55% equity and was in compliance with the covenants of its revolvingcredit facility, term loan facility and other debt agreements. 

Term Facility

In November 2015, the Company entered into a $750 million unsecured three-year term loan credit agreement with various tenders that was utilized to repay borrowings under the revolving credit facility.  The interest rate on the term loan facility is determined based upon the Company’s public debt ratings from S&P and Moody’s and was 162.5 basis points over the London Interbank Offered Rate (“LIBOR”) as of March 31, 2016.  The term loan facility requires prepayment under certain circumstances from the net cash proceeds of sales of equity or certain assets and borrowings outside the ordinary course of business.

18

Public Offering of Senior Notes

In January 2015, the Company completed a public offering of $350 million aggregate principal amount of its 3.30% senior notes due 2018 (the “2018 Notes”), $850 million aggregate principal amount of its 4.05% senior notes due 2020 (the “2020 Notes”) and $1 billion aggregate principal amount of its 4.95% senior notes due 2025 (the “2025 Notes” together with the 2018 and 2020 Notes, the “Notes”), with net proceeds from the offering totaling approximately $2.2 billion after underwriting discounts and offering expenses.  The proceeds from this offering were used to repay the remaining principal and interest outstanding under the Company’s $4.5 billion 364-day bridge term loan facility, which was first reduced with proceeds from the Company’s concurrent underwritten public offerings of common and preferred stock, and were also used to repay a portion of amounts outstanding under the Company’s revolving credit facility.  As a result of this repayment, the Company expensed $47 million of short-term unamortized debt issuance costs related to the bridge facility in January 2015 recognized in other interest charges on the unaudited condensed consolidated statement of operations for the three months ended March 31, 2015.  The Notes were sold to the public at a price of 99.949% of their face value for the 2018 Notes, 99.897% of their face value for the 2020 Notes and 99.782% of their face value for the 2025 Notes.  The interest rates on the Notes is determined based upon the Company’s public debt ratings from S&P and Moody’s.  Downgrades from either rating agency increase interest costs by 25.0 basis points per downgrade level on the following semi-annual bond interest payment.  In February 2016, S&P and Moody’s downgraded the Company’s credit ratings, increasing the interest rates on these notes by 125.0 basis points effective July 2016.  As a result of the downgrade, the Company’s interest expense for 2016 will increase $14 million.  The first higher interest rate coupon payment to bondholders will be paid in January 2017.

Commercial Paper

In April 2015, the Company entered into a commercial paper program which allowed it to issue up to $2.0 billion in commercial paper provided that borrowings from its commercial paper program combined with outstanding borrowings under itsrevolving credit facility, not exceed $2.0 billion. The commercial paper issuance had terms of up to 397 days and carried interest at rates agreed upon at the time of each issuance.As of March 31, 2016, the Company had nooutstanding issuances under its commercial paper program and had no plans of utilizing the commercial paper market for the remainder of 2016.

(11) COMMITMENTS AND CONTINGENCIES

Operating Commitments and Contingencies

As of March 31, 2016, the Company’s contractual obligations for demand and similar charges under firm transportation and gathering agreements to guarantee access capacity on natural gas and liquids pipelines and gathering systems totaled approximately $8.6 billion, $3.3 billion of which related to access capacity on future pipeline and gathering infrastructure projects that still require the granting of regulatory approvals and additional construction efforts. The Company also had guarantee obligations of up to $861 million of that amount.

Environmental Risk

The Company is subject to laws and regulations relating to the protection of the environment. Environmental and cleanup related costs of a non-capital nature are accrued when it is both probable that a liability has been incurred and when the amount can be reasonably estimated. Management believes any future remediation or other compliance related costs will not have a material effect on the financial position or results of operations of the Company.

Litigation

The Company is subject to various litigation, claims and proceedings that have arisen in the ordinary course of business, such as for alleged breaches of contract, miscalculation of royalties, and pollution, contamination or nuisance. Management believes that such litigation, claims and proceedings, individually or in aggregate and after taking into account insurance, are not likely to have a material adverse impact on the Company’s financial position, results of operations or cash flows. Many of these matters are in early stages, so the allegations and the damage theories have not been fully developed, and are all subject to inherent uncertainties; therefore, management’s view may change in the future. If an unfavorable final outcome were to occur, there exists the possibility of a material impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.

19

Tovah Energy 

In February 2009, one of the Company’s subsidiaries was added as a defendant in a case then styled Tovah Energy, LLC and Toby Berry-Helfand v. David Michael Grimes, et, al., pending in the 273rd District Court in Shelby County, Texas. By the time of trial in December 2010, Ms. Berry-Helfand (the only remaining plaintiff) alleged that, in 2005, she provided the Company’s subsidiary with proprietary data regarding two prospects in the James Lime formation pursuant to a confidentiality agreement and that the Company’s subsidiary refused to return the proprietary data to the plaintiff, subsequently acquired leases based upon such proprietary data and profited therefrom. Among other things, she alleged various statutory and common law claims, including, but not limited to, claims of misappropriation of trade secrets, violation of the Texas Theft Liability Act, breach of fiduciary duty and confidential relationships, various fraud based claims and breach of contract, including a claim of breach of a purported right of first refusal on all interests acquired by the Company’s subsidiary between February 2005 and February 2006. She also sought disgorgement of the Company’s subsidiary’s profits. A former associate of the plaintiff intervened in the matter claiming to have helped develop the prospect years earlier.

The jury found in favor of the plaintiff and the intervenor with respect to all of the statutory and common law claims and awarded $11 million in compensatory damages but no special, punitive or other damages. Separately, the jury determined that the Company’s subsidiary’s profits for purposes of disgorgement, if ordered as a remedy, were $382 million. (Disgorgement of profits is an equitable remedy determined by the judge, and it is within the judge’s discretion to award none, some or all of unlawfully obtained profits.) In August 2011, a judgment was entered pursuant to which the plaintiff and the intervenor were entitled to recover approximately $11 million in actual damages and approximately $24 million in disgorgement as well as prejudgment interest and attorneys’ fees, which currently are estimated to be up to $9 million, and all costs of court of the plaintiff and intervenor.

Both sides appealed and in July 2013, the Tyler Court of Appeals ordered that (1) the judgment awarding the plaintiff and the intervenor $24 million as disgorgement of illicit gains be reversed and judgment rendered that they take nothing, (2) the award of $11 million for actual damages, insofar as it is based on the jury’s findings of breach of fiduciary duty, fraud, breach of contract, and theft of trade secret is reversed and judgment rendered that the plaintiff and the intervenor take nothing under those theories of recovery, (3) the award of $11 million to the plaintiff and the intervenor as damages for misappropriation of trade secrets is affirmed, (4) the case be remanded to the trial court for a determination and award of attorney’s fees for the Company’s subsidiary as the prevailing party under the Texas Theft Liability Act, and (5) in all other respects, the judgment is affirmed. All parties petitioned for rehearing. The Tyler Court of Appeals denied rehearing in November 2013.

The Company’s subsidiary filed a petition for review in the Supreme Court of Texas in February 2014. The plaintiff and the intervenor filed a cross-petition for review in April 2014, but conditioned their filing on the court’s granting the Company’s subsidiary’s petition for review; i.e., if the court denies the Company’s subsidiary’s petition for review, then the plaintiff and the intervenor are not seeking further review of the court of appeals’ judgment.  The Supreme Court granted the parties’ petitions and heard oral argument on the case in October 2015 but has not yet issued a decision.Based on the Company’s understanding and judgment of the facts and merits of this case, including appellate matters, and after considering the advice of counsel, the Company has determined that, although reasonably possible, a materially adverse final outcome to this action is not probable. As such, the Company has not accrued any amounts with respect to this action. If the Supreme Court affirms all aspects of the court of appeals’ judgment, then the Company’s subsidiary would owe the $11 million in damages, plus interest and attorneys’ fees, offset by any award of attorneys’ fees for its prevailing on the theft count. The Company’s assessment may change in the future depending on the Supreme Court’s decision, and such a re-assessment could lead to the determination that the potential liability is probable and could be material to the Company’s results of operations, financial position or cash flows. 

Arkansas Royalty Litigation

Certain of the Company’s subsidiaries are defendants in three cases, two filed in Arkansas state court in 2010 and 2013 and one in federal court in 2014, on behalf of putative classes of royalty owners on some of the Company’s leases located in Arkansas.  The chief complaint in all three cases is that one of the Company’s subsidiaries underpaid the royalty owners by, among other things, deducting from royalty payments costs for gathering, transportation, and compression of natural gas in excess of what is permitted by the relevant leases.  In September and October 2014 the judges in the two Arkansas state actions entered orders certifying classes of royalty owners who are citizens of Arkansas.  The Company’s subsidiaries have appealed those orders.  Oral argument has not yet been set in either case.

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On November 17, 2015, the court in the federal case denied the plaintiff’s motion to certify a class of royalty owners not included in either of the two state cases.  On April 11, 2016, the court certified a broader class that includes Arkansas residents and citizens.  The plaintiff in the federal case presented two alternative damages theories.  Under one theory, plaintiffs have asserted that obligations to affiliates are not “incurred” and therefore the exploration and production subsidiary was not entitled to deduct any post-production costs; the federal court has granted partial summary judgment for the Company’s subsidiaries on this theory.  Under another theory, plaintiffs assert that the gathering and treating rates it deducted from royalty payments exceeded the affiliates’ actual costs or otherwise were not reasonable.  The plaintiffs have not disclosed a specific damage calculation for any putative class, but based on the class representative’s disclosure regarding the calculation of claimed damages, class-wide damages could exceed $100 million.  Although trial previously was set for March 15, 2016, following transfer to a different judge and the certification of the class described above, that trial date has been vacated and no new date set.

In addition, in September 2015 three cases were filed in Arkansas state court on behalf of a total of 248 individually named plaintiffs.  Each case asserts complaints that are in substance virtually identical to the above-described case.  The Company and its subsidiaries have removed two of the cases to federal court, and those cases have been assigned to the court in which the above-described federal case is pending.  All three cases have been stayed.

Management believes that, in all of the above cases, the deductions from royalty payments as calculated are permitted and intends to defend the cases vigorously.  The Company’s assessment may change in the future due to the occurrence of certain events, such as adverse judgments, and such a re-assessment could lead to the determination that the potential liability is probable and could be material to the Company’s results of operations, financial position or cash flows.

Indemnifications

The Company provides certain indemnifications in relation to dispositions of assets.  These indemnifications typically relate to disputes, litigation or tax matters existing at the date of disposition.No liability has been recognized in connection with these indemnifications.

(12) PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS

The Company has defined pension and postretirement benefit plans which cover substantially all of the Company’s employees. Net periodic pension costs include the following components for the three months ended March 31, 2016 and 2015:  

	Pension Benefits
	For the three months ended
	March 31,
	2016		2015
	(in millions)
Service cost	$	4	$	4
Interest cost		2		1
Expected return on plan assets		(2)		(2)
Amortization of prior service cost		–		–
Amortization of net loss		–		1
Net periodic benefit cost	$	4	$	4

The Company’s postretirement benefit plan had a net periodic benefit cost of $1 million as of the three months ended March 31, 2016 and 2015. For the three months ended March 31, 2016, the Company has contributed $3 million to the pension and postretirement benefit plans. In January 2016, the Company initiated a reduction in workforce that was effectively completed by the end of the first quarter. As a result of the workforce reduction, the Company continues to evaluate its pension and other postretirement benefit funding requirements and will disclose its funding plans once reasonably determined.

The Company maintains a non-qualified deferred compensation supplemental retirement savings plan (“Non-Qualified Plan”) for certain key employees who may elect to defer and contribute a portion of their compensation, as permitted by the plan. Shares of the Company’s common stock purchased under the terms of the Non-Qualified Plan are presented as treasury stock and totaled 31,269 shares at March 31, 2016 compared to 47,149  shares at December 31, 2015.

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(13) STOCK-BASED COMPENSATION

The Company recognized the following amounts in employee stock-based compensation costs for the three months ended March 31, 2016 and 2015:

	For the three months ended
	March 31,
	2016		2015
	(in millions)
Stock-based compensation cost – expensed (1)	$	23	$	6
Stock-based compensation cost – capitalized	$	3	$	5

(1) Includes $18 million related to the reduction in workforce that occurred in the first quarter of 2016.

In January 2016, the Company announced a 40% workforce reduction that was substantially concluded by the end of March 2016.  Affected employees were offered a severance package that included, if applicable, amendments to outstanding equity awards that modified forfeiture provisions on separation from the Company.  As a result, unvested stock-based equity awards became fully vested at the time of separation.  These shares were revalued and recognized immediately as a component of restructuring charges on the Company’s condensed consolidated statements of operations.

As of March 31, 2016,  there was $86 million of total unrecognized compensation cost related to the Company’s unvested stock option grants, restricted stock grants and performance units. This cost is expected to be recognized over a weighted-average period of 3 years.

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2016 and provides information for options outstanding and options exercisable as of March 31, 2016:

	Number		Weighted Average
	of Options		Exercise Price
	(in thousands)		(per share)
Outstanding at December 31, 2015		5,623	$	24.57
Granted		156		8.60
Exercised		–		–
Forfeited or expired		(10)		30.29
Outstanding at March 31, 2016		5,769		24.13
Exercisable at March 31, 2016		2,567	$	36.12

Restricted Stock

The following table summarizes restricted stock activity for the three months ended March 31, 2016 and provides information for unvested shares as of March 31, 2016:  

	Number		Weighted Average
	of Shares		Fair Value
	(in thousands)		(per share)
Unvested shares at December 31, 2015		7,222	$	13.24
Granted		77		8.35
Vested (1)		(1,947)		8.32
Forfeited		(24)		12.11
Unvested shares at March 31, 2016		5,328	$	13.24

(1) Includes 1,887,160 shares related to the reduction in workforce that occurred in the first quarter of 2016.

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Equity-Classified Performance Units

The following table summarizes performance unit activity to be paid out in Company stock for the three months ended March 31, 2016 and provides information for unvested units as of March 31, 2016.  The performance units awarded in 2013 and 2014 include a market condition based on Relative Total Shareholder Return (“TSR”) and a performance condition based on the Company's Present Value Index (“PVI”), collectively the “Performance Measures.”The fair value of the TSR market condition of the performance units is based on a Monte Carlo model and is amortized to compensation expense on a straight-line basis over the vesting period of the award. The fair value of the PVI performance condition of the performance units is based on economic analysis for each investment opportunity based upon the expected present value added for each dollar to be invested and amortized to compensation expense on a straight line basis over the vesting period of the award. The performance units awarded in 2015 are based exclusively on TSR.  The grant date fair value is calculated using the Performance Measures and the closing price of the Company’s common stock at the grant date.

	Number		Weighted Average
	of Units (1)		Fair Value
	(in thousands)		(per share)
Unvested units at December 31, 2015		407	$	36.65
Granted (2)		1,061		8.31
Vested (3)		(5)		8.08
Forfeited		(38)		8.08
Unvested units at March 31, 2016		1,425	$	14.47

(1) These amounts reflect the number of performance units granted in thousands. The actual payout of shares may range from a minimum of zero shares to a maximum of two shares contingent upon the actual performance against the Performance Measures.

(2) Excludes 441,450 units in excess of individual award limits subject to shareholder approval of the amended 2013 Incentive Plan at the annual meeting on May 17, 2016.

(3) Includes 5,168units related to the reduction in workforce that occurred in the first quarter of 2016.

Liability-Classified Performance Units

Prior to 2013, certain employees were provided performance units vesting equally over three years, payable in cash.  The payout of these units was based on certain metrics, such as total shareholder return and reserve replacement efficiency, compared to a predetermined group of peer companies and Company goals.  At the end of each performance period, the value of the vested performance units, if any, would bepaid in cash.  In the first quarter of 2016, the Companycompleted the final payout under these performance unit agreements.

(14) SEGMENT INFORMATION

The Company’s reportable business segments have been identified based on the differences in products or services provided. Revenues for the E&P segment are derived from the production and sale of natural gas and liquids. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas and liquids volumes and through gathering fees associated with the transportation of natural gas to market.

Summarized financial information for the Company’s reportable segments is shown in the following table. The accounting policies of the segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of the 2015 Annual Report. Management evaluates the performance of its segments based on operating income, defined as operating revenues less operating costs. Income before income taxes, for the purpose of reconciling the operating income amount shown below to consolidated income before income taxes, is the sum of operating income, interest expense, gain (loss) on derivatives, and other loss. The “Other” column includes items not related to the Company’s reportable segments including real estate and corporate items.

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	Exploration and			Midstream
	Production			Services			Other			Total
	(in millions)
Three months ended March 31, 2016:
Revenues from external customers	$	343		$	236		$	–		$	579
Intersegment revenues		(7)			385			–			378
Depreciation, depletion and amortization expense		127			16			–			143
Impairment of natural gas and oil properties		1,034			–			–			1,034
Operating income (loss)		(1,160)	(1)		60	(2)		–			(1,100)
Interest expense (3)		14			–			–			14
Other loss, net		(2)			(1)			–			(3)
Loss on derivatives		(13)			(1)			–			(14)
Provision for income taxes (3)		1			–			–			1
Assets		5,538			1,220			1,760	(4)		8,518
Capital investments (5)		120			2			–			122
Three months ended March 31, 2015:
Revenues from external customers	$	660		$	273		$	–		$	933
Intersegment revenues		(5)			665			1			661
Depreciation, depletion and amortization expense		278			15			–			293
Operating income (loss)		78			88			(1)			165
Interest expense (3)		45			7			(1)			51
Other loss, net		(1)			–			–			(1)
Gain (loss) on derivatives		15			–			(1)			14
Provision for income taxes (3)		18			31			–			49
Assets		13,703			1,616			242	(4)		15,561
Capital investments (5)		1,030			138			3			1,171

(1) Operating income (loss) for the E&P segment includes $61 million related to restructuring charges.

(2) Operating income (loss) for the Midstream segment includes $3 million related to restructuring charges.

(3) Interest expense and the provision forincome taxes by segment are an allocation of corporate amounts as they are incurred at the corporate level.

(4) Other assets represent corporate assets not allocated to segments and assets for non-reportable segments.  At March 31, 2016, other assets includes $1.55 billion in marketable securities, which were sold on April 1, 2016 to repay revolver debt.  See Note 2 to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional discussion.

(5) Capital investments includes a  $78 million decrease and an immaterial increase for the three months ended March 31, 2016 and 2015, respectively, relating to the change in accrued expenditures between periods.  E&P capital for the three month period ended March 31, 2015 includes approximately $534 million related to the WPX Property and Statoil Property Acquisitions. Midstream capital for the three months ended March 31, 2015 includes approximately $119 million associated with the intangible asset related to the firm transportation acquired through the WPX Property Acquisition.

Included in intersegment revenues of the Midstream Services segment are $319 million and $576 million for the three months ended March 31, 2016 and 2015, respectively for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, furniture and fixtures and other costs. Corporate general and administrative costs, depreciation expense and taxes other than income are allocated to the segments. Capital investments within the E&P segment include $1 million for the three months ended March 31, 2016 and 2015, related to the Company’s activities in Canada. The Company’s E&P segment assets included $53 million and $71 million at March 31, 2016 and 2015, respectively, related to the Company’s activities in Canada.

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(15)  INCOME TAXES

The Company’s effective tax rate was approximately 0% for the three months ended March 31, 2016, primarily as a result of the recognition of a valuation allowance.  A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized.  To assess that likelihood, the Company uses estimates and judgment regarding future taxable income, and considers the tax consequences in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required.  Such evidence can include current financial position, results of operations, both actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business economics of the oil and gas industry. 

Due to the material write-downs of the carrying value of oil and natural gas properties and operating results, the Company is in a net deferred tax asset position.  The Company believes it is more likely than not that these deferred tax assets will not be realizedand recorded a $431 million tax expense for the increase in our valuation allowance.  Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets.  A significant piece of objective negative evidence evaluated is the projected cumulative loss incurred over the three-year period ending December 31, 2016.  Such objective negative evidence limits the ability to consider other subjective positive evidence, such as projections for future growth. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as future expected growth.

(16)  NEW ACCOUNTING PRONOUNCEMENTS

New Accounting Standards Implemented

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30) (“Update 2015-03”), in an effort to simplify presentation of debt issuance costs. Update 2015-03 required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs was not affected by the amendments in this Update. Entities were required to apply the amendments in Update 2015-03 on a retrospective basis, with the balance sheet of each individual period presented adjusted to reflect the period-specific effects of applying the new guidance. In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Interest-Imputation of Interest (Subtopic 835-30) (“Update 2015-15”), which addressed the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements, given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements.  For public entities, Update 2015-03 and Update 2015-15 were effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company adopted this update in the first quarter of 2016 resulting in an immaterial impact on its unaudited condensed consolidated results of operations, financial position and cash flows. At December 31, 2015, the Company had $24 million in unamortized debt expense that was classified as a long-term asset.  As of March 31, 2016, long-term debt included a contra liability of $23 million for unamortized debt expense previously recognized as a long-term asset.

In May 2015, the FASB issued Accounting Standards Update No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (Or Its Equivalent) (“Update 2015-07”), which amends ASC 820, Fair Value Measurement. The standard removes the requirement to categorize within the fair value hierarchy investments for which fair value is measured using the net asset value per share practical expedient and removes certain related disclosure requirements. The amendments in Update 2015-07 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted this update in the first quarter of 2016 resulting in no impact on its unaudited condensed consolidated results of operations, financial position and cash flows.

In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805) (“Update 2015-16”), which seeks to reduce the complexity of amounts recognized in a business combination. The amendments in Update 2015-16 require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in Update 2015-16 require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in Update 2015-16 require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments in Update 2015-

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16 were effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company adopted this update in the first quarter of 2016 resulting in no impact on its unaudited condensed consolidated results of operations, financial position and cash flows.

In November 2014, the FASB issued Accounting Standards Update No. 2014-16, Derivatives and Hedging – Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (Subtopic 815-15) (“Update 2014-16”), addresses diversity in practice related to the determination of whether derivative features embedded in hybrid instruments issued in the form of a share should be bifurcated and accounted for separately. For public entities, Update 2014-16 was effective for annual reporting periods beginning after December 15, 2015 including interim periods within that reporting period. The Company adopted this update in the first quarter of 2016 resulting in no impact on its unaudited condensed consolidated results of operations, financial position and cash flows.

New Accounting Standards Not Yet Implemented

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Update 2014-09”), which seeks to provide clarity for recognizing revenue. Topic 606 Revenue from Contracts with Customers will supersede the revenue recognition requirement as in Topic 605 Revenue Recognition. Update 2014-09 requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to those goods or services. Entities may apply the amendments in Update 2014-09 either (a) retrospectively to each reporting period presented, and the entity may elect a practical expedient per the update, or (b) retrospectively with the cumulative effect of initially applying Update 2014-09 recognized at the date of initial application – if an entity elects this transition method it also should provide the additional disclosures in reporting periods. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606)(“Update 2015-14”). Deferral of the Effective Date, which finalizes proposed ASU No. 2015-240 of the same name and responds to stakeholders’ request to defer the effective date of the guidance in ASU No. 2014-09. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)(“Updated 2016-08”), which finalized proposed ASU No. 2015-290 of the same name and clarifies the implementation guidance on principal versus agent considerations. For public entities, Update 2014-09, Update 2015-14, and Update 2016-08 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the provisions of Update 2014-09, Update 2015-14 and Update 2016-08 and assessing the impact, if any, they may have on its consolidated results of operations, financial position or cash flows.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330) (“Update 2015-11”), which seeks to simplify the measurement of inventory. Update 2015-11 requires that an entity should measure inventory at the lower of cost and net realizable value, where net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For public entities, the amendments in Update 2015-11 are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of Update 2015-11 and assessing the impact, if any, it may have on its consolidated results of operations, financial position or cash flows.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“Update 2016-02”), which seeks to increase transparency and comparability among organizations by, among other things, recognizing lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous GAAP and disclosing key information about leasing arrangements. For public entities, Update 2016-02 becomes effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of Update 2016-02 and assessing the impact, if any, it may have on its consolidated results of operations, financial position or cash flows.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718) (“Update 2016-09”), which seeks to simplify accounting for share-based payment transactions including income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. For public entities, Update 2016-09 becomes effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of Update 2016-09 and assessing the impact, if any, it may have on its consolidated results of operations, financial position or cash flows.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following updates information as to Southwestern Energy Company’s financial condition provided in our 2015 Annual Report and analyzes the changes in the results of operations between the three months ended March 31, 2016 and 2015.  For definitions of commonly used natural gas and oil terms used in this Quarterly Report, please refer to the “Glossary of Certain Industry Terms” provided in our 2015 Annual Report.

The following discussion contains forward-looking statements that involve risks and uncertainties.  Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the risks described in the “Cautionary Statement About Forward-Looking Statements” in the forepart of this Quarterly Report, in Item 1A, “Risk Factors” in Part I and elsewhere in our 2015 Annual Report, and Item 1A, “Risk Factors” in Part II in this Quarterly Report and any other quarterly report on Form 10-Q filed during the fiscal year.  You should read the following discussion with our unaudited condensed consolidated financial statements and the related notes included in this Quarterly Report.

OVERVIEW

Background

Southwestern Energy Company (including its subsidiaries, collectively, “we”, “our”, “us” or “Southwestern”) is an independent energy company engaged in natural gas andoilexploration, development and production, which we refer to as “E&P.”  We are also focused on creating and capturing additional value through our natural gas gathering and marketing businesses, which we refer to as Midstream Services.  We operate principally in two segments: E&P and Midstream Services.

Our primary business is the exploration, development and production of natural gas and oil.  Our current operations are principally focused on the development of unconventional natural gas reservoirs located in Pennsylvania, West Virginia and Arkansas.  Our operations in northeast Pennsylvania, which we refer to as “Northeast Appalachia” are primarily focused on the unconventional natural gas reservoir known as the Marcellus Shale.  Our operations in West Virginia and southwest Pennsylvania, which we refer to as “Southwest Appalachia,” are focused on the Marcellus Shale, the Utica and the Upper Devonian unconventional natural gas and oil reservoirs.  Collectively, we refer to our properties located in Pennsylvania and West Virginia as the “Appalachian Basin.”  Our operations in Arkansas are primarily focused on an unconventional natural gas reservoir known as the Fayetteville Shale.  We also actively seek to find and develop new natural gas and oil plays with significant exploration and exploitation potential, which we refer to as “New Ventures.”  Under our New Ventures operations, we have exploration and production activities ongoing in Colorado and Louisiana, along with other areas in which we are currently exploring for new development opportunities.  We operate drilling rigs and provide oilfield products and services, principally serving our exploration and production operations, though the level of these services in 2016 will depend on our capital investing for the year.  Our natural gas gathering and marketing activities primarily support our E&P activities in Arkansas, Pennsylvania, Louisiana and West Virginia.

We are focused on providing long-term growth in the net asset value per share of our business.  Historically, the vast majority of our operating income and cash flow has been derived from the production associated with our E&P business.  However, in 2015, depressed commodity prices significantly decreased our E&P results of operations.  The price we expect to receive for our production is a critical factor in the capital investments we make to develop our properties.In the fourth quarter of2015, we decreased activity in the Appalachian Basin and the Fayetteville Shale as a result of the lower commodity price environment.  Based on current forward pricing, we expect this decreased activity to continue throughout 2016.  We anticipate adjusting our activity levels throughout our portfolio and are targeting a capital investment program aligned with the cash flow expected to be generated during the year.  Natural gas prices fluctuate due to a variety of factors we cannot control or predict. These factors, which include increased supplies of natural gas due to greater exploration and development activities, weather conditions, political and economic events, and competition from other energy sources, impact supply and demand for natural gas, which in turn determines the sales prices for our production.We  are impacted by crude oil and natural gas liquids (“NGLs”) prices, which have been volatile and have recently declined significantly. In addition to the factors identified above, the prices we realize for our production are affected by our hedging activities as well as locational differences in market prices, including basis differentials. Current 2016 forward pricing will likely result in additional impairments to our natural gas and oil properties in the second quarter of 2016 ranging from approximately $250 million to $350 million, net of taxes, when excluding future changes in costs excluded from amortization, with material impairments likely continuing beyond the second quarter.

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Recent Financial and Operating Results

We reported a net loss attributable to common stock of $1.2  billion for the three months ended March 31, 2016, or ($3.03) per diluted share, compared to net income attributable to common stock of $46 million, or $0.12 per diluted share, for the three months ended March 31, 2015.  

Our natural gas and liquidsproduction increased to 237 Bcfe for the three months ended March 31, 2016,  up 2%from 233 Bcfe for the three months ended March 31, 2015.  The4Bcfe increase was due to 11Bcf and 10 Bcfe increases in net production from our Northeast and Southwest Appalachia properties, respectively, partially offset by a17Bcf decrease in net production from our Fayetteville Shale and other properties.  The average price realized for our gas production, including the effects of derivatives,  decreased 51% to $1.48 per Mcf for the three months ended March 31, 2016, compared to $2.99per Mcf for the same period in 2015.  The average price realized for our oil production decreased 40% to $18.65 per barrel for the three months ended March 31, 2016, compared to $30.90 for the same period in 2015.  The average price realized for our NGL production decreased 52% to $4.98 per barrel for the three months ended March 31, 2016, compared to $10.35 for the same period in 2015.  We did not financially protect our 2016 or 2015 oil or NGL production.

Our E&P segment reported anoperating loss of $1.2 billion for the three months ended March 31, 2016, down from operating income of $78 million for the three months ended March 31, 2015.  This decrease was primarily due to a $1.0 billion non-cash ceiling test impairment.  Excluding the impairment, our E&P segment reported an operating loss of $126 million, primarily due to a 51%, or $1.51 per Mcf, decrease in our realized natural gas price (including derivatives) along with decreases in our realized oil and NGL prices.  These decreases were partially offset by a 4 Bcfe increase in productionand a $115 million decrease in operating costs and expenses.

Operating income for our Midstream Services segment was $60 million for the three months ended March 31, 2016, down from $88 million for the three months ended March 31, 2015, due to a $34 million decrease in gas gathering revenues partially offset by a $6 million decrease in operating costs and expenses.In the second quarter of 2015, we sold our northeastern Pennsylvania and East Texas gathering assets that accounted for $13 million in operating income for the three months ended March 31, 2015.  

Capital investments were $122 million for the three months ended March 31, 2016(including $41 million in capitalized interest and $21 million in capitalized expenses) of which $120 million was invested in our E&P segment, compared to $1.2billion for the same period of 2015 (including $653 million, in total, related to the acquisitions from WPX Energy, Inc. and Statoil ASA) of which $1.0billion was invested in our E&P segment.

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RESULTS OF OPERATIONS

The following discussion of our results of operations for our segments is presented before intersegment eliminations. We evaluate our segments as if they were stand-alone operations and accordingly discuss their results prior to any intersegment eliminations. Interest expense and income tax expense are discussed on a consolidated basis.

Exploration and Production
	For the three months
	ended March 31,
	2016		2015
Revenues (in millions)	$	336	$	655
Impairment of natural gas and oil properties (in millions)	$	1,034	$	–
Operating costs and expenses (in millions)	$	462	$	577
Operating income (loss) (in millions)	$	(1,160)	$	78
Gain on derivatives, settled (in millions) (1)	$	8	$	36
Gas production (Bcf)		213		219
Oil production (MBbls)		607		545
NGL production (MBbls)		3,376		1,766
Total production (Bcfe)		237		233
Average realized gas price per Mcf, including derivatives (2)	$	1.48	$	2.99
Average realized gas price per Mcf, excluding derivatives	$	1.44	$	2.63
Average realized oil price per Bbl	$	18.65	$	30.90
Average realized NGL price per Bbl	$	4.98	$	10.35
Average unit costs per Mcfe:
Lease operating expenses	$	0.88	$	0.92
General & administrative expenses (3)	$	0.19	$	0.24
Taxes, other than income taxes  (4)	$	0.08	$	0.12
Full cost pool amortization	$	0.49	$	1.15

(1) Represents the gain (loss) on settled commodity derivatives.

(2) Includes the gain (loss) on settled commodity derivatives.

(3) Excludes $58 million of restructuring charges in 2016.

(4) Excludes $3 million of restructuring charges in 2016.

Revenues

Revenues for our E&P segment were down $319 million, or 49%, for the three months ended March 31, 2016, compared to the same period in 2015.  A decrease in the price realized from the sale of our natural gas production decreased revenue by $254 million.  Additionally there was a decrease of $42 million in hedge settlement proceeds, a $26million decrease as a result of decreased liquids pricing and a decrease of $16 million due to lower natural gas production volumes, partially offset by a $19 million increase due to increased liquid production volumes. For the remainder of 2016, we expect to have decreased activity in our Appalachian Basin and Fayetteville Shale assets as a result of the lower commodity price environment.  Natural gas, oil, and NGL prices are difficult to predict and are subject to wide price fluctuations.  As of March 31, 2016, we had protected107 Bcf of our remaining 2016 natural gas production to limit our exposure to price fluctuations. We refer you to Note 7 to the unaudited condensed consolidated financial statements included in this Quarterly Report and to the discussion of “Commodity Prices” provided below for additional information. In May 2015, we sold our conventional oil and gas assets located in East Texas and the Arkoma Basin that accounted for $10 million of our natural gas and oil revenues for the three months ended March 31, 2015.

Production

For the three months ended March 31, 2016, our natural gas and liquids production increased 2% to 237 Bcfe,  up from 233 Bcfe from the same period in 2015, and was produced entirely by our properties in the United States. The4Bcfe increase was due to 11Bcf and 10 Bcfe increases in net production from our Northeast and Southwest Appalachia properties, respectively, partially offset by a17Bcf decrease in net production from our Fayetteville Shale and other properties.Net production from our Northeast Appalachia, Southwest Appalachia and Fayetteville Shale properties was 94 Bcf, 40 Bcfe and 103 Bcf respectively, for the three months ended March 31, 2016 compared to 83 Bcf, 30 Bcfe, and 115 Bcf, respectively, for the same period in 2015.

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Commodity Prices

The average price realized for our natural gas production, including the effects of derivatives,  decreased to $1.48 per Mcf for the three months ended March 31, 2016, as compared to $2.99 for the same period in 2015.  The decrease was the result of a $1.19 per Mcf decrease in the average natural gas price, excluding derivatives,  and lower proceeds from our derivative program during the three months ended March 31, 2016 as compared to the same period in 2015. The average price realized for our natural gas production, excluding the effects of derivatives,  decreased 45% to $1.44 per Mcf for the three months ended March 31, 2016, as compared to the same period in 2015.  Our derivativesincreased the average realized natural gas price by $0.04 per Mcf for the three months ended March 31, 2016 compared to an increase of $0.36 per Mcf for the same period in 2015.

Our E&P segment receives a sales price for our natural gas at a discount to average monthly NYMEX settlement prices due to heating content of the gas, locational basis differentials, transportation and fuel charges. Additionally, we receive a sales price for our oil and NGLs at a discount to average monthly West Texas Intermediate settlement and Mont Belvieu NGL composite prices, respectively, due to a number of factors including product quality, composition and types of NGLs sold, locational basis differentials, transportation and fuel charges.

We periodically enter into various hedging and other financial arrangements with respect to a portion of our projected natural gas production in order to ensure certain desired levels of cash flow and to minimize the impact of price fluctuations, including fluctuations in locational market differentials. We refer you to Item 3, “Quantitative and Qualitative Disclosures About Market Risks” and Note 7 to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional discussion about our derivatives and risk management activities.

Excluding the impact of derivatives, the average price received for our natural gas production for the three months ended March 31, 2016 of $1.44 per Mcf was approximately $0.65 lower than the average monthly NYMEX settlement price, primarily due to locational basis differentials and transportation costs. We protected approximately 44% of our natural gas production for the three months ended March 31, 2016 from the impact of widening basis differentials through our sales arrangementsand hedging activities.  For the three months ended March 31, 2016, we protected the basis on approximately 94 Bcf of our natural gas production through physical sales arrangements.  We have protected basis on approximately 160 Bcf and 69 Bcf of our remaining 2016 and 2017 expected natural gas production through physical sales arrangements at a basis differential to NYMEX natural gas prices of approximately ($0.19) per Mcf and ($0.19) per Mcf for the remainder of 2016 and 2017, respectively.  We had 5 Bcf of basis hedge positions in place during the first quarter of 2016.  As of March 31, 2016, we hadno future financial basis hedges in place.

We realized an average sales price of $18.65 per barrel for our oil production for the three months ended March 31, 2016, down 40% from$30.90 per barrel for the same period in 2015.  We did not financially protect our 2016 or 2015 oil production.Oil accounted for 2% and  1% of our total production for the three months ended March 31, 2016 and 2015, respectively.

We realized an average sales price of $4.98 per barrel for our NGL production for the three months ended March 31, 2016, down 52% from  $10.35 per barrel for the same period in 2015.We did not financially protect our 2016 or 2015 NGL production. NGLs accounted for 9% and5% of our total production for the three months ended March 31, 2016 and 2015, respectively.

Operating Income

Our E&P segment reported an operating loss of $1.2 billion for the three months ended March 31, 2016, down from operating income of $78 million for the three months ended March 31, 2015.  This decrease was primarily due to a $1.0 billion non-cash ceiling test impairment.  Excluding the impairment, our E&P segment reported an operating loss of $126 million, primarily due to a 51%, or $1.51 per Mcf, decrease in our realized natural gas price (including derivatives) along with decreases in our realized oil and NGL prices.  These decreases were partially offset by a 4 Bcfe increase in production and a $115million decrease in operating costs and expenses.  The $115 million decrease in operating costs and expenses resulted primarily from a $151 million decrease in DD&A, an $11 million decrease in general and administrative expenses, a $7 million decrease in operating expenses and a $7 million decrease in taxes other than income partially offset by a $61 million increase in restructuring charges. In May 2015, we sold our conventional oil and gas assets located in East Texas and the Arkoma Basin that accounted for $2 million of our natural gas and oiloperating income for the three months ended March 31, 2015.

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Operating Costs and Expenses

Lease operating expenses per Mcfe for the E&P segment were $0.88 for the three months ended March 31, 2016, compared to $0.92 for the same period in 2015. Lease operating expenses per unit of production decreased for the three months ended March 31, 2016, as compared to the same period of 2015 primarily due to decreased gathering charges resulting from the successful renegotiation of our existing gathering and processing rates for our Southwest Appalachia production.

Excluding the restructuring charges associated with our workforce reduction, general and administrative expenses for the E&P segment were $0.19 per Mcfe for the three months ended March 31, 2016, compared to $0.24 per Mcfe for the same period in 2015 primarily due to the decrease in employee costs.In total, excluding restructuring charges, general and administrative expenses for the E&P segment were $45 million for the three months ended March 31, 2016, compared to $56 million for the three months ended March 31, 2015.  Including restructuring charges, general and administrative costs for the first quarter of 2016 were $103 million for our E&P segment.

Taxes other than income taxes per Mcfe were $0.08 for the three months ended March 31, 2016 (excluding $3 million related to restructuring charges),compared to $0.12 for the same period in 2015.  Taxes other than income taxes per Mcfe vary from period to period due to changes in severance and ad valorem taxes that result from the mix of our production volumes and fluctuations in commodity prices.

Our full cost pool amortization rate averaged $0.49 per Mcfe for the three months ended March 31, 2016, compared to $1.15 for the same period in 2015.  The amortization rate is impacted by the timing and amount of reserve additions and the costs associated with those additions, revisions of previous reserve estimates due to both price and well performance, write-downs that result from full cost ceiling tests, proceeds from the sale of properties that reduce the full cost pool and the levels of costs subject to amortization.  We cannot predict our future full cost pool amortization rate with accuracy due to the variability of each of the factors discussed above, as well as other factors, including but not limited to the uncertainty of the amount of future reserve changes. 

Unevaluated costs excluded from amortization were $3.5 billion at March 31, 2016, compared to $3.7 billion at December 31, 2015. The decrease in unevaluated costs primarily resulted from our evaluation of a portion of our New Ventures assets. Unevaluated costs excluded from amortization at March 31, 2016included $53 million related to our properties in Canada, compared to $50 million at December 31, 2015.

Midstream Services
	For the three months ended
	March 31,
	2016		2015
	($ in millions, except volumes)
Marketing revenues	$	518	$	801
Gas gathering revenues	$	103	$	137
Marketing purchases	$	503	$	786
Operating costs and expenses (1)	$	58	$	64
Operating income	$	60	$	88
Volumes marketed (Bcfe)		279		260
Volumes gathered (Bcf)		165		233

(1) Includes $3 million of restructuring charges in 2016.

Revenues

Revenues from our marketing activities were down 35% to $518 million for the three months ended March 31, 2016, compared to the same period in 2015.  For the three months ended March 31, 2016, the price received for volumes marketed decreased40% and the volumes marketed increased 7% compared to the same period in 2015.  Increases and decreases in marketing revenues due to changes in commodity prices are largely offset by corresponding changes in marketing purchase expenses. Of the total natural gas volumes marketed, production from our affiliated E&P operated wells accounted for 96% and 98% of the natural gas marketed volumes for the three months ended March 31, 2016 and 2015, respectively.  Our Midstream Services segment marketed approximately 67% and 40% of our combined oil and NGL production for the three months ended March 31, 2016 and 2015, respectively.

Revenues from our gathering activities were down 25% to $103 million for the three months ended March 31, 2016, compared to the same period in 2015. The decrease in gathering revenues for the three months ended March 31, 2016 was primarily due to the divestiture of our northeast Pennsylvania and East Texas gathering assets in 2015 and decreased

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volumes in the Fayetteville Shale. The divested gathering assets accounted for $20 million of our gathering revenues for the three months ended March 31, 2015.

Operating Income

Operating income from our Midstream Services segment decreased 32% to $60 million for the three months ended March 31, 2016, compared to $88 million for the same period in 2015.  The $28 million decrease in operating income for the three months ended March 31, 2016 was due to a $34 million decrease in gas gathering revenues slightly offset by a$6 million decrease in operating costs and expenses.  In the second quarter of 2015, we sold our northeastern Pennsylvania and East Texas gathering assets that accounted for $13 million of our operating income for the three months ended March 31, 2015.

The margin generated from marketing activities was $15 million for the three months ended March 31, 2016 and 2015.  Margins are driven primarily by volumes marketed and may fluctuate depending on the prices paid for commodities and the ultimate disposition of those commodities. We enter into hedging activities from time to time with respect to our natural gas marketing activities to provide margin protection. For more information about our derivatives and risk management activities, we refer you to Item 3, “Quantitative and Qualitative Disclosures About Market Risks” included in this Quarterly Report for additional information.

Restructuring Charges

In January 2016, we announced a40% workforce reduction that was substantially concluded by the end of March 2016.  Affected employees were offered a severance package which included a one-time cash payment depending on length of service and, if applicable, accelerated vesting of outstanding stock-based equity awards.  As a result of this workforce reduction, we recognized restructuring charges of $64 million for the three months ended March 31, 2016.

Interest Expense

Interest expense, net of capitalization, was $14 million for the three months ended March 31, 2016, compared to $51 million for the same period in 2015.  Excluding a $47 million charge for unamortized fees associated with the repayment of our bridge facility in the first quarter of 2015, interest expense, net of capitalization, increased $10 million for the three months ended March 31, 2016, compared to the same period in 2015, primarily due to an increase in our cost of debt. We capitalized interest of $41 and  $48 million for the three months ended March 31, 2016 and 2015, respectively. The decrease in capitalized interest for the three months ended March 31, 2016 compared to the same period in 2015 was primarily due to the evaluation of a portion of our Southwest Appalachia assets, acquired in December 2014.

Gain (Loss) on Derivatives

In general, our basis swaps, certain fixed price swaps, sold call options, purchased put options and interest rate swaps are not designated for hedge accounting treatment. Changes in the fair value of derivatives that are not designated for hedge accounting are recorded in gain (loss) on derivatives.  We recorded a $14 million net loss on our derivatives for the three months ended March 31, 2016 consisting of a $21 million loss on unsettled derivatives partially offset by a $7 million gain on settled derivatives.  For the three months ended March 31, 2015, we recorded a $14 million net gain on our derivatives consisting of a $21 million loss on unsettled derivatives more than offset by a $35 million gain on settled derivatives.  We refer you to Note 7 to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional detail about our gain (loss) on derivatives.  In general and without consideration of volatility or duration, as 2016 natural gas prices increase from March 31, 2016 levels, we will recognize losses in future periods and, likewise, as 2016 natural gas prices decline from March 31, 2016 levels, we will recognize gains in future periods on our derivative contracts not accounted for under hedge accounting prior to settlement.

Income Taxes

Our effective tax rate was approximately 0% and 39% for the three months ended March 31, 2016 and 2015, respectively. We recorded income tax expenses of $1 million and $49 million for the three months ended March 31, 2016 and 2015, respectively.  The low effective income tax rate at March 31, 2016 was the result of our recognition of a valuation allowance that reduced the deferred tax asset primarily related to our current net operating loss carryforward.  A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized.

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New Accounting Standards Implemented in this Report

Refer to Note 16 to the unaudited condensed consolidated financial statements of this Quarterly Report for further discussion of new accounting standards implemented.

New Accounting Standards Not Yet Implemented in this Report

Refer to Note 16 to the unaudited condensed consolidated financial statements of this Quarterly Report for a discussion of new accounting standards which have not yet been implemented.

LIQUIDITY AND CAPITAL RESOURCES

We depend primarily on internallygenerated funds, our $2.0 billion revolving credit facility,  funds accessed through term loans such as our $750 million term loan facility,our cash and cash equivalents balance and capital markets as our primary sources of liquidity.

In the first quarter of 2016, we decreased activity in the Appalachian Basin and Fayetteville Shale as a result of the low commodity price environment.  Based on current forward pricing, we expect this decreased activity to continue throughout 2016.  Accordingly, we anticipate adjusting our activity levels and are targeting a capital investment program aligned with the cash flow expected to be generated during the year.  We have the financial flexibility to draw on a portion of the funds available under our revolving credit facility or cash and cash equivalents balance to fund the portion of our planned capital investments exceeding our operating cash flow as necessary (discussed below under “Capital Investments”). We refer you to Note 10 of the unaudited condensed consolidated financial statements included in this Quarterly Report and the section below under “Financing Requirements” for additional discussion of our revolving credit facility and commercial paper program.

At March 31, 2016, our capital structure consisted of 81% net debt and 19% equity, excluding $23 million and $3 million of unamortized issuance cost and unamortized debt discount, respectively.  This temporary high level of debt resulted from a drawdown of $1.55 billion on our revolving credit facility on March 30, 2016 that was repaid on April 1, 2016.  As part of our ongoing review of options to address our long-term debt maturities, having the cash from the $1.55 borrowing as an asset on our consolidated balance sheet as of the last day of the first quarter of 2016 expanded our flexibility by increasing the maximum amount of our secured debt or debt of our subsidiaries that may be incurred during the second quarter of 2016 in accordance with our credit facilities and indentures, if we should decide to utilize debt of these types to retire, rearrange or extend existing debt and credit facilities.  We believe that our operating cash flow and available funds under our revolving credit facility along with our cash and cash equivalents will be adequate to meet our capital and operating requirements for the remainder of 2016.  If we do not have adequate liquidity or are unable to obtain financing on favorable terms or at all, however, we may not be able to make intended capital investments, which could restrict our ability to grow and could have a material adverse effect on our results of operations, cash flows and financial condition.  Additionally, our ability to make payments on and to refinance our indebtedness will depend on our ability to generate cash in the future.  The credit status of the financial institutions participating in our revolving credit facility could adversely impact our ability to borrow funds under the revolving credit facility.  Although we believe all of the lenders under the facility have the ability to provide funds, we cannot predict whether each will be able to meet their obligation to us.  We refer you to the section below under “Financing Requirements” for additional discussion of our compliance with the covenants of our revolving credit and term loan facilities.

Net cash provided by operating activities decreased 83% to $92 million for the three months ended March 31, 2016, down from $541 million for the same period in 2015, due to a decrease in net income adjusted for non-cash expenses and changes in working capital accounts. During the three months ended March 31, 2016, requirements for our capital investments were funded primarily from our cash generated by operating activities, net proceeds from borrowings under our revolving credit facility, commercial paper, and cash and cash equivalents. For the three months ended March 31, 2016, net cash generated from operating activities provided 75% of our cash requirements for capital investments, compared to 46% for the same period in 2015.

Our cash flow from operating activities is highly dependent upon the sales prices that we receive for our natural gas and liquids production. Natural gas, oil and NGL prices are subject to wide fluctuations and are driven by market supply and demand, which is impacted by many factors. The sales price we receive for our production is also influenced by our commodity hedging activities. See “Quantitative and Qualitative Disclosures about Market Risks” in Item 3 and Note 7to the unaudited condensed consolidated financial statements included in this Quarterly Report for further details. Our commodity hedging activities are subject to the credit risk of our counterparties being financially unable to complete the transaction. We actively monitor the credit status of our counterparties, performing both quantitative and qualitative assessments based on their credit ratings and credit default swap rates where applicable, and to date have not had any

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credit defaults associated with our transactions. However, any future failures by one or more counterparties could negatively impact our cash flow from operating activities.

Additionally, our short-term cash flows are dependent on the timely collection of receivables from our customers and co-owners. We actively manage this risk through credit management activities and, through the date of this filing have not experienced any significant write-offs for non-collectable amounts. However, any sustained inaccessibility of credit by our customers and co-owners could adversely impact our cash flows.

Due to these above factors, we are unable to forecast with certainty our future level of cash flow from operations. Accordingly, we will adjust our discretionary uses of cash dependent upon available cash flow.  Further, we may from time to time seek to retire or rearrange some or all of our outstanding debt or preferred stock through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise.  Such transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Capital Investments

Our capital investments for the three months ended March 31, 2016 were $122 million and $1.2 billion for the three months ended March 31, 2015, which included $653 million, in total, related to acquisitions from WPX Energy, Inc. (“WPX”) and Statoil ASA (“Statoil”).  Our E&P segment investments were $120 million and $1.0 billion for the three months ended March 31, 2016 and 2015, respectively.  Our E&P segment capitalized internal costs of $27 million for the three months ended March 31, 2016 compared to $86 million for the comparable period in 2015.  These internal costs were directly related to acquisition, exploration and development activities and are included as part of the cost of natural gas and oil properties.

Overall planned capital investments for 2016 are expected to range between $350 million and $400 million.  We anticipate adjusting our activity levels throughout our portfolio and are targeting a capital investment aligned with the cash flow expected to be generated during the year.  Although our 2016 capital investment program has been, and is expected to continue to be funded through cash flow from operations, we have the financial flexibility to utilize borrowings under our revolving credit facility along with our cash and cash equivalents.

Financing Requirements

Our total debt outstanding was $6.5 billion at March 31, 2016, compared to $4.7 billion at December 31, 2015.  The increase at March 31, 2016 related primarily to short-term borrowing on our revolving credit facility of $1.55 billion on March 30, 2016 that was repaid on April 1, 2016.  As part of our ongoing review of options to address our long-term debt maturities, having the cash from the $1.55 borrowing as an asset on our consolidated balance sheet as of the last day of the first quarter of 2016 expanded our flexibility by increasing the maximum amount of our secured debt or debt of our subsidiaries that may be incurred during the second quarter of 2016 in accordance with our credit facilities and indentures, if we should decide to utilize debt of these types to retire, rearrange or extend existing debt and credit facilities.  See Note 2and Note 10 to the unaudited condensed consolidated financial statements included in this Quarterly Report for further details.

In November 2015, we entered into a $750 million unsecured three-year term loan credit agreement with various lenders that was used to repay borrowings under the revolving credit facility.  The interest rate on the term loan facility is determined based upon our public debt ratings from S&P and Moody’s and was 162.5 basis points over the London Interbank Offered Rate (“LIBOR”) as of March 31, 2016.  The term loan facility requires prepayment under certain circumstances from the net cash proceeds of sales of equity or certain assets and borrowings outside the ordinary course of business.

In April 2015, we entered into a commercial paper program which allowed us to issue up to $2.0 billion in commercial paper, provided that outstanding borrowings from our commercial paper program, combined with outstanding borrowings under our revolving credit facility, not exceed $2.0 billion. The commercial paper issuance had terms of up to 397 days and carried interest at rates agreed upon at the time of each issuance. As of March 31, 2016, we had no outstanding issuances under our commercial paper program and have no plans of utilizing the commercial paper market for the remainder of 2016.

In January 2015, we completed concurrent underwritten public offerings of 30,000,000 shares of common stock and 34,500,000 depositary shares (both share counts include shares issued as a result of the underwriters exercising their options to purchase additional shares). Net proceeds from the offerings totaled approximately $2.3 billion after underwriting discount and expenses. Each depositary share represents a 1/20th interest in a share of our mandatory

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convertible preferred stock, with a liquidation preference of $1,000 per share (equivalent to a $50 liquidation preference per depositary share). The proceeds from the offerings were used to partially repay borrowings under a  $4.5 billion 364-day bridge facility that we entered into in December 2014 in connection with our acquisition of assets in Southwest Appalachia, with the remaining balance fully repaid with proceeds from our January 2015 public offering of $2.2 billion in senior notes.

The mandatory convertible preferred stock entitles the holders to a proportional fractional interest in the rights and preferences of the convertible preferred stock, including conversion, dividend, liquidation and voting rights.  Dividends are to be paid at a rate of 6.25% per annum on the liquidation preference of $1,000 per share and can be paid in cash, common stock or a combination of both.Unless converted earlier at the option of the holders, on or around January 15, 2018 each share of convertible preferred stock will automatically convert into between 37.0028 and 43.4782 shares of our common stock (and, correspondingly, each depositary share will convert into between 1.85014 and 2.17391 shares of our common stock), subject to customary anti-dilution adjustments, depending on the volume-weighted average price of our common stock over a 20 trading-day period immediately prior to that date.

Our mandatory convertible preferred stock has the non-forfeitable right to participate on an as-converted basis at the conversion rate then in effect in any common stock dividends declared and as such, is considered a participating security. As such, it isincluded in the computation of basic and diluted earnings per share, pursuant to the two-class method. In the calculation of basic earnings per share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings.

In January 2015, we completed a public offering of $350 million aggregate principal amount of our 3.30% senior notes due 2018 (the “2018 Notes”), $850 million aggregate principal amount of our 4.05% senior notes due 2020 (the “2020 Notes”) and $1.0 billion aggregate principal amount of our 4.95% senior notes due 2025 (the “2025 Notes” and together with the 2018 and 2020 Notes, the “Notes”), with net proceeds from the offering totaling approximately $2.2 billion after underwriting discounts and offering expenses. The proceeds from the sale of the Notes were used to repay all principal and interest remaining outstanding under our $4.5 billion 364-day bridge facility, which was first reduced with proceeds from our concurrent underwritten public offerings of common stock and depositary shares. Proceeds from the sale of the Notes were also used to repay a portion of amounts outstanding under our revolving credit facility. The Notes were sold to the public at a price of 99.949% of their face value for the 2018 Notes, 99.897% of their face value for the 2020 Notes and 99.782% of their face value for the 2025 Notes.  The interest rates on the Notes is determined based on our public debt ratings from S&P and Moody’s.  Downgrades from either rating agency increase our interest costs by 25.0 basis points per downgrade level on the following semi-annual bond interest payment.  Based on the February 2016 downgrades from S&P and Moody’s, our interest rates on these notes will increase by 125.0 basis points effective July 2016. As a result of the downgrade, our interest expense for 2016 will increase $14 million.

In December 2013, we entered into a credit agreement that exchanged our previous revolving credit facility.Under the revolving credit facility, we have a borrowing capacity of $2.0 billion reduced for outstanding letters of credit.  We had $148 million in letters of credit outstanding as of March 31, 2016.  The amount available under our credit facility could be further reduced by up to $250 million related to potential requirements to post additional letters of credit.  Our current revolving credit facility has a maturity date of December 2018.  The interest rate on the revolving credit facility is determined based upon our public debt ratings from S&P and Moody’s andwas 200 basis points over LIBOR as of March 31, 2016.   The revolving credit facility is unsecured and is not guaranteed by any of our subsidiaries. Contemporaneously with the execution of the credit agreement, in December 2013, we obtained releases of subsidiary guarantees under the 7.15%, 7.5%, 7.35%, 7.125% and 4.10% senior notes.

At March 31, 2016, we had a long-term issuer credit rating of BB+ by S&P and a long-term debt rating of B1 by Moody’s. Any further downgrades in our public debt ratings by S&P or Moody’s could increase our cost of funds and decrease our liquidity under the revolving credit facility.

Our revolving credit and term loan facilities contain covenants that impose certain restrictions on us. Under our revolving credit and term loan facilities, we must keep our total debt at or below 60% of our total adjusted book capital. This financial covenant with respect to capitalization percentages excludes the effects of any non-cash impacts from any full cost ceiling impairments, certain non-cash hedging activities, unamortized issuance cost, unamortized debt discount and our pension and other postretirement liabilities. Therefore, under our revolving credit and term loan facilities,  our adjusted capital structure as of March 31, 2016,  was 45% debt and 55% equity.  We were in compliance with all of the covenants of our revolving credit and term loan facilities as of March 31, 2016.  Although we do not anticipate any violations of our financial covenants, our ability to comply with these covenants is dependent upon the success of our exploration and development program and upon factors beyond our control, such as the market prices for natural gas and oil.  If we are unable to borrow under our revolving credit facility, we may have to decrease our capital investment plans.

35

At March 31, 2016,our capital structure consisted of 81%  net debt and 19% equity  (including $1,597 million in cash and cash equivalents),  compared to 67% net debt and 33% equity(including  $15 million in cash and cash equivalents) at December 31, 2015.

Our derivative contracts allow us to ensure a certain level of cash flow to fund our operations.  At April 19, 2016, we had NYMEX commodity price derivatives in place on 107 Bcf of our remaining targeted 2016 natural gas production. The amount of long-term debt we incur will be largely dependent upon commodity prices and our capital investment plans.

Off-Balance Sheet Arrangements

We may enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations.  As of March 31, 2016, our material off-balance sheet arrangements and transactions include operating lease arrangements.  There are no other transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect our liquidity or availability of our capital resources.  For more information regarding off-balance sheet arrangements, we refer you to “Contractual Obligations and Contingent Liabilities and Commitments” in our 2015 Annual Report.

Contractual Obligations and Contingent Liabilities and Commitments

We have various contractual obligations in the normal course of our operations and financing activities.  Other than the firm transportation agreements discussed below, there have been no material changes to our contractual obligations from those disclosed in our 2015 Annual Report.

Contingent Liabilities and Commitments

As of March 31, 2016, our contractual obligations for demand and similar charges under firm transportation and gathering agreements to guarantee access capacity on natural gas and liquids pipelines and gathering systems totaled approximately $8.6 billion, $3.3 billion of which related to access capacity on future pipeline and gathering infrastructure projects that still require the granting of regulatory approvals and/or additional construction efforts.  This amount also included guarantee obligations of up to $861 million.  As of March 31, 2016, future payments under non-cancelable firm transportation and gathering agreements are as follows:

	Payments Due by Period
	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years
		(in millions)
Infrastructure Currently in Service	$	5,305	$	591	$	1,164	$	932	$	2,618
Infrastructure Pending Regulatory Approval and/or Construction (1)		3,311		10		200		444		2,657
Total Transportation and Gathering Charges	$	8,616	$	601	$	1,364	$	1,376	$	5,275

(1) Based on the estimated in-service dates as of March 31, 2016.

Substantially all of our employees are covered by defined benefit and postretirement benefit plans. For the three months endedMarch 31, 2016, we have contributed $3 million to the pension and postretirement benefit plans.  In January 2016, the Company initiated a reduction in workforce that was effectively completed by the end of the first quarter.  As a result of the workforce reduction, the Company continues to evaluate its pension and other postretirement benefit funding requirements and will disclose its funding plans once reasonably determined. As ofMarch 31, 2016 and December 31, 2015, we recognized a liability of $50 million as a result of the underfunded status of our pension and other postretirement benefit plans.

We are subject to litigation, claims and proceedings that arise in the ordinary course of business, such as for alleged breaches of contract, miscalculation of royalties and pollution, contamination or nuisance.  Management believes that such litigation, claims and proceedings, individually or in aggregate and after taking into account insurance, are not likely to have a material adverse impact on our financial position, results of operations or cash flows.  Many of these matters are in early stages, so the allegations and the damage theories have not been fully developed, and are all subject to inherent uncertainties; therefore, management’s view may change in the future. If an unfavorable final outcome were to occur, there exists the possibility of a material impact on our financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable.We accrue for such items when a liability is both probable and the amount can be reasonably estimated.  For further information, we refer you to “Legal Proceedings” in Item 1 of Part II of this Quarterly Report.

36

We are also subject to laws and regulations relating to the protection of the environment.  Environmental and cleanup related costs of a non-capital nature are accrued when it is both probable that a liability has been incurred and when the amount can be reasonably estimated.  Management believes any future remediation or other compliance related costs will not have a material effect on our financial position or results of operations.  

Working Capital

We maintain access to funds that may be needed to meet capital requirements through our revolving credit facility described in “Financing Requirements” above. We had positive working capital of $1,406 million at March 31, 2016 and negative working capital of $314 million at December 31, 2015.The positive working capital as of March 31, 2016 was primarily due to $1.55 billion of marketable securities borrowed on our revolving credit facility and paid back on April 1, 2016.  The negative working capital as of December 31, 2015 was primarily due to a decrease in derivative assets in 2015.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risks relating to our operations result primarily from the volatility in commodity prices, basis differentials and interest rates, as well as credit risk concentrations.  We use fixed price swap agreements, fixed price options, basis swaps and interest rate swaps to reduce the volatility of earnings and cash flow due to fluctuations in the prices of natural gas and interest rates.  Our Board of Directors has approved risk management policies and procedures to utilize financial products for the reduction of defined commodity price risk.  Utilization of financial products for the reduction of interest rate risks is subject to the approval of our Board of Directors.  These policies prohibit speculation with derivatives and limit swap agreements to counterparties with appropriate credit standings.

Credit Risk

Our financial instruments that are exposed to concentrations of credit risk consist primarily of trade receivables and derivative contracts associated with commodities trading.  Concentrations of credit risk with respect to receivables are limited due to the large number of our purchasers and their dispersion across geographic areas. No single purchaser accounted for greater than 10% of revenues for the three months ended March 31, 2016.  See “Commodities Risk” below for discussion of credit risk associated with commodities trading.

Interest Rate Risk

At March 31, 2016, we had approximately $3.9 billion of outstanding senior notes with a weighted average interest rate of 4.817%,$750 million of term loan facility debt with a variable interest rate of 2.025%, $1,852 million of borrowings under our revolving credit facility with a variable interest rate of 4.154%, and no outstanding balance on our commercial paper program.  The increase in borrowings on our revolving credit facility at March 31, 2016 related primarily to short-term borrowing of $1.55 billion on March 30, 2016 that was repaid on April 1, 2016.  We currently have an interest rate swap in effect to mitigate a portion of our exposure to volatility in interest rates.

Commodities Risk

We use over-the-counter fixed price swap agreements and options to protect sales of our production against the inherent risks of adverse price fluctuations or locational pricing differences between a published index and the NYMEX futures market.  These swaps and options include transactions in which one party will pay a fixed price (or variable price) for a notional quantity in exchange for receiving a variable price (or fixed price) based on a published index (referred to as price swaps) and transactions in which parties agree to pay a price based on two different indices (referred to as basis swaps).  For additional information on our derivatives and risk management, see Note 7 in the unaudited condensed consolidated financial statements included in this Quarterly Report.

The primary market risks relating to our derivative contracts are the volatility in market prices and basis differentials for natural gas.  However, the market price risk is offset by the gain or loss recognized upon the related sale or purchase of the natural gas that is financially protected.  Credit risk relates to the risk of loss as a result of non-performance by our counterparties.  The counterparties are primarily major banks and integrated energy companies that management believes present minimal credit risks.  The credit quality of each counterparty and the level of financial exposure we have to each counterparty are closely monitored to limit our credit risk exposure.  Additionally, we perform both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable.  We have not incurred any counterparty losses related to non-performance and do not anticipate any losses given the information we have currently.  However, we cannot be certain that we will not experience such losses in the future.

37

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act.  Our disclosure controls and procedures are the controls and other procedures that we have designed to ensure that we record, process, accumulate and communicate information to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and submission within the time periods specified in the SEC’s rules and forms.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those determined to be effective can provide only a level of reasonable assurance with respect to financial statement preparation and presentation.  Based on the evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of March 31, 2016 at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Refer to “Litigation” and “Environmental Risk” in Note 11 to the unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for a discussion of the Company’s legal proceedings.

ITEM 1A. RISK FACTORS.

There were no additions or material changes to our risk factors as disclosed in Item 1A of Part I in the Company’s 2015 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Our sand mining operations in support of our E&P business are subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.106) is included in Exhibit 95.1 to this Quarterly Report.

ITEM 5. OTHER INFORMATION.

Not applicable.

38

ITEM 6. EXHIBITS.

(10.1)	Southwestern Energy Company 2013 Incentive Plan Form of Performance Unit Award Agreement.
(10.2)	Retirement Agreement dated January 11, 2016 between Southwestern Energy Company and Steven L. Mueller.  (Incorporated by reference to Exhibit 10.38 to the Registrant’s Annual Report on Form 10-K (Commission File No. 1-08246) for the year ended December 31, 2015)
(31.1)	Certification of CEO filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(31.2)	Certification of CFO filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32.1)	Certification of CEO furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(32.2)	Certification of CFO furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(95.1)	Mine Safety Disclosure.
(101.INS)	Interactive Data File Instance Document.
(101.SCH)	Interactive Data File Schema Document.
(101.CAL)	Interactive Data File Calculation Linkbase Document.
(101.LAB)	Interactive Data File Label Linkbase Document.
(101.PRE)	Interactive Data File Presentation Linkbase Document.
(101.DEF)	Interactive Data File Definition Linkbase Document.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SOUTHWESTERN ENERGY COMPANY

Registrant

Dated:	April 21, 2016	/s/ R. CRAIG OWEN
		R. Craig Owen
		Senior Vice President
		and Chief Financial Officer

39

EX-10

	
		
			Exhibit 10.1
		
	
	

EX-31

Exhibit 31.1

CERTIFICATION

I, William J. Way, certify that:
	1. I have reviewed this Quarterly Report on Form 10-Q of Southwestern Energy Company;
	2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:	April 21, 2016		/s/ WILLIAM J. WAY
				William J. Way
				Director, President and Chief Executive Officer

EX-31

Exhibit 31.2

CERTIFICATION

I, R. Craig Owen, certify that:
	1. I have reviewed this Quarterly Report on Form 10-Q of Southwestern Energy Company;
	2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:	April 21, 2016		/s/ R. CRAIG OWEN
				R. Craig Owen
				Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

In connection with the Quarterly Report of Southwestern Energy Company, a Delaware corporation (the “Corporation”) on Form 10-Q for the quarter ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William J. Way, Director, President and Chief Executive Officer of the Corporation, certify to my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and    

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Dated:      April 21, 2016	/s/ WILLIAM J. WAY
	William J. Way
	Director, President and Chief Executive Officer

EX-32

Exhibit 32.2

CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

In connection with the Quarterly Report of Southwestern Energy Company, a Delaware corporation (the “Corporation”) on Form 10-Q for the quarter ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, R. Craig Owen, Senior Vice President and Chief Financial Officer of the Corporation, certify to my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and    

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Dated:      April 21, 2016	/s/ R. CRAIG OWEN
	R. Craig Owen
	Senior Vice President and Chief Financial Officer

EX-95

EXHIBIT 95.1

Mine Safety Disclosure

The following disclosure is provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977.  

The table that follows reflects citations, orders, violations and proposed assessments issued by the Mine Safety and Health Administration (the “MSHA”) to SWN Production (Arkansas), LLC, an indirect wholly owned subsidiary of Southwestern Energy Company.  The disclosure is with respect to the three months ended March 31, 2016.  Due to timing and other factors, the data may not agree with the mine data retrieval system maintained by the MSHA at www.MSHA.gov.

Southwestern Energy Company
Mine Safety Disclosure
Three Months Ended March 31, 2016
(Unaudited)

Section 104(d) Citations and Orders

Received Notice of Pattern of Violations Under Section 104(e)

Section 104 S&S Citations

Section 104(b) Orders

Section 110(b)(2) Violations

Section 107(a) Orders

Total Dollar Value of Proposed MSHA Assessments(2)

Total Number of Mining Related  Fatalities

Received Notice of Potential to Have Pattern Under Section 104(e)

Legal Actions Pending as of the Last Day of  Period

Operation(1)

Legal Actions Initiated During Period

Legal Actions Resolved During Period

SWN Production (Arkansas), LLC

0

0

0

0

0

$0

0

0

0

0

Total

$0

No

No

(1)

The definition of mine under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools, and preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine.

(2)

The whole-dollar amounts included are the total dollar value of proposed or outstanding assessments received from MSHA on or before March 31, 2016 regardless of whether the assessment has been challenged or appealed, for alleged violations occurring during the three month period ended March 31, 2016. Citations and orders can be contested and appealed, and as part of that process, are sometimes reduced in severity and amount, and are sometimes dismissed. The number of citations, orders, and proposed assessments vary by inspector and also vary depending on the size and type of the operation.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 19, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Registrant Name	SOUTHWESTERN ENERGY CO
Entity Central Index Key	0000007332
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		392,666,629
Trading Symbol	SWN

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Revenues:
Gas sales	$ 315	$ 625
Oil sales	11	17
NGL sales	17	18
Marketing	198	225
Gas gathering	38	48
Total Operating Revenues	579	933
Operating Costs and Expenses:
Marketing purchases	196	222
Operating expenses	165	155
General and administrative expenses	54	68
Restructuring charges	64
Depreciation, depletion and amortization	143	$ 293
Impairment of natural gas and oil properties	1,034
Taxes, other than income taxes	23	$ 30
Total Operating Costs and Expenses	1,679	768
Operating Income (Loss)	(1,100)	165
Interest Expense:
Interest on debt	53	50
Other interest charges	2	49
Interest capitalized	(41)	(48)
Total Interest Expense	14	51
Other (Loss), Net	(3)	(1)
Gain (Loss) on Derivatives	(14)	14
Income (Loss) Before Income Taxes	(1,131)	127
Provision (Benefit) for Income Taxes:
Deferred	1	49
Net Income (Loss)	(1,132)	78
Mandatory convertible preferred stock dividend	$ 27	25
Participating securities - mandatory convertible preferred stock		7
Net Income (Loss) Attributable to Common Stock	$ (1,159)	$ 46
Earnings (Loss) Per Common Share:
Basic	$ (3.03)	$ 0.12
Diluted	$ (3.03)	$ 0.12
Weighted Average Common Shares Outstanding:
Basic	382,870,847	375,444,030
Diluted	382,870,847	375,578,054

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME LOSS [Abstract]
Net income (loss)		$ (1,132)	$ 78
Change in derivatives:
Settlements	[1]		(25)
Change in fair value of derivative instruments	[2]		17
Total change in derivatives			(8)
Change in value of pension and other postretirement liabilities:
Amortization of prior service cost and net loss included in net periodic pension cost	[3]	$ 1
Change in currency translation adjustment		3	(6)
Comprehensive income (loss)		$ (1,128)	$ 64

[1] Net of ($17) million in taxes for the three months ended March 31, 2015.

[2] Net of $7 million in taxes for the three months ended March 31, 2015.

[3] Net of $1 million in taxes for the three months ended March 31, 2016.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME LOSS [Abstract]
Settlements tax		$ (17)
Change in fair value of derivative instruments tax		$ 7
Amortization of prior service cost and net loss included in net periodic pension cost tax	$ 1

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 1,597	$ 15
Accounts receivable, net	224	327
Derivative assets	35	3
Other current assets	28	48
Total current assets	1,884	393
Natural gas and oil properties, using the full cost method, including $3,505 million as of March 31, 2016 and $3,727 million as of December 31, 2015 excluded from amortization	22,610	22,478
Gathering systems	1,281	1,280
Other	602	606
Less: Accumulated depreciation, depletion and amortization	(18,002)	(16,821)
Total property and equipment, net	6,491	7,543
Other long-term assets	143	150
TOTAL ASSETS	8,518	8,086
Current liabilities:
Short-term debt	1	1
Accounts payable	346	513
Taxes payable	52	64
Interest payable	32	75
Dividends payable	27	27
Derivative liabilities	8	3
Other current liabilities	12	24
Total current liabilities	478	707
Long-term debt	6,442	4,704
Deferred income taxes	2
Pension and other postretirement liabilities	50	50
Other long-term liabilities	398	343
Total long-term liabilities	$ 6,892	$ 5,097
Commitments and contingencies (Note 11)
Equity:
Common stock, $0.01 par value; 1,250,000,000 shares authorized; issued 389,673,678 shares as of March 31, 2016 (does not include 3,024,737 shares declared as a stock dividend on March 16, 2016 and issued on April 15, 2016) and 390,138,549 as of December 31, 2015	$ 4	$ 4
Preferred stock, $0.01 par value, 10,000,000 shares authorized, 6.25% Series B Mandatory Convertible, $1,000 per share liquidation preference, 1,725,000 shares issued and outstanding as of March 31, 2016 and December 31, 2015
Additional paid-in capital	$ 3,403	$ 3,409
Accumulated deficit	(2,214)	(1,082)
Accumulated other comprehensive loss	(44)	(48)
Common stock in treasury, 31,269 shares as of March 31, 2016 and 47,149 shares as of December 31, 2015, respectively	(1)	(1)
Total equity	1,148	2,282
TOTAL LIABILITIES AND EQUITY	$ 8,518	$ 8,086

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Natural gas and oil properties, using the full cost method, costs excluded from amortization	$ 3,505	$ 3,727
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,250,000,000	1,250,000,000
Common stock, shares issued	389,673,678	390,138,549
Common stock, shares declared as stock dividend	3,024,737
Treasury stock, shares	31,269	47,149
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, dividend rate	6.25%	6.25%
Liquidation preference per share	$ 1,000	$ 1,000
Preferred stock, shares issued	1,725,000	1,725,000
Preferred stock, shares outstanding	1,725,000	1,725,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows From Operating Activities
Net income (loss)	$ (1,132)	$ 78
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	143	$ 293
Impairment of natural gas and oil properties	1,034
Amortization of debt issuance cost	2	$ 46
Deferred income taxes	1	49
Loss on derivatives, net of settlement	21	21
Stock-based compensation	9	6
Restructuring charges	42
Other	5
Change in assets and liabilities:
Accounts receivable	103	38
Accounts payable	(124)	(35)
Taxes payable	(12)	(20)
Interest payable	(11)	(1)
Other assets and liabilities	11	66
Net cash provided by operating activities	92	541
Cash Flows From Investing Activities
Capital investments	(196)	(508)
Acquisitions		(591)
Proceeds from sale of property and equipment		1
Other		3
Net cash used in investing activities	(196)	(1,095)
Cash Flows From Financing Activities
Payments on short-term debt		(4,500)
Payments on revolving credit facility	(864)	(830)
Borrowings under revolving credit facility	2,600	$ 1,330
Payments on commercial paper	(242)
Borrowings under commercial paper	242
Change in bank drafts outstanding	(19)	$ (7)
Proceeds from issuance of long-term debt		2,200
Debt issuance costs		(17)
Proceeds from issuance of common stock		669
Proceeds from issuance of mandatory convertible preferred stock		1,673
Preferred stock dividend	(27)
Other	(4)
Net cash provided by financing activities	1,686	518
Increase (decrease) in cash and cash equivalents	1,582	(36)
Cash and cash equivalents at beginning of year	15	53
Cash and cash equivalents at end of period	$ 1,597	$ 17

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - 3 months ended Mar. 31, 2016 - USD ($) $ in Millions	Common Stock [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Common Stock in Treasury [Member]	Total
Balance, shares at Dec. 31, 2015	390,138,549	1,725,000
Balance at Dec. 31, 2015	$ 4		$ 3,409	$ (1,082)	$ (48)	$ (1)	$ 2,282
Comprehensive loss:
Net loss				(1,132)			(1,132)
Other comprehensive income					4		4
Comprehensive income (loss)							(1,128)
Stock-based compensation			26				26
Preferred stock dividend			(27)				(27)
Issuance of restricted stock, shares	84,165
Cancellation of restricted stock, shares	(24,333)
Tax withholding - stock compensation, shares	(524,703)
Tax withholding - stock compensation			(5)				(5)
Balance, shares at Mar. 31, 2016	389,673,678	1,725,000
Balance at Mar. 31, 2016	$ 4		$ 3,403	$ (2,214)	$ (44)	$ (1)	$ 1,148

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Basis Of Presentation

3 Months Ended

Mar. 31, 2016

Basis Of Presentation [Abstract]

Basis Of Presentation

(1) BASIS OF PRESENTATION

Southwestern Energy Company (including its subsidiaries, collectively “Southwestern” or the “Company”) is an independent energy company engaged in natural gas and oil exploration, development and production (“E&P”). The Company’s current operations are principally focused within the United States on the development of unconventional reservoirs located in Pennsylvania, West Virginia and Arkansas.  

The Company’s operations in northeast Pennsylvania are primarily focused on the unconventional natural gas reservoir known as the Marcellus Shale (herein referred to as “Northeast Appalachia”), its operations in West Virginia and southwest Pennsylvania are focused on the Marcellus Shale, the Utica and the Upper Devonian unconventional natural gas and oil reservoirs (herein referred to as “Southwest Appalachia”) and its operations in Arkansas are primarily focused on an unconventional natural gas reservoir known as the Fayetteville Shale. Collectively, the Company’s properties located in Pennsylvania and West Virginia are herein referred to as the “Appalachian Basin.”  The Company also actively seeks to find and develop new natural gas and oil plays with significant exploration and exploitation potential, which it refers to as “New Ventures,” and has exploration and production activities ongoing in Colorado and Louisiana, along with other areas in which it is currently exploring for new development opportunities.  The Company also has drilling rigs in Pennsylvania, West Virginia and Arkansas, as well as in other operating areas, and provides oilfield products and services, principally serving its exploration and production operations. Southwestern’s natural gas gathering and marketing (“Midstream Services”) activities primarily support the Company’s E&P activities in Arkansas, Pennsylvania, Louisiana and West Virginia.  

The accompanying unaudited condensed consolidated financial statements were prepared using accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information relating to the Company’s organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been appropriately condensed or omitted in this Quarterly Report. The Company believes the disclosures made are adequate to make the information presented not misleading.

The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented herein. It is recommended that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report for the year ended December 31, 2015 (“2015 Annual Report”).

The Company’s significant accounting policies, which have been reviewed and approved by the Audit Committee of the Company’s Board of Directors, are summarized in Note 1 in the Notes to the Consolidated Financial Statements included in the Company’s 2015 Annual Report.

Certain reclassifications have been made to the prior year financial statements to conform to the 2016 presentation.  The effects of the reclassifications were not material to the Company’s unaudited condensed consolidated financial statements.

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Cash And Cash Equivalents

3 Months Ended

Mar. 31, 2016

Cash And Cash Equivalents [Abstract]

Cash And Cash Equivalents

(2)  CASH AND CASH EQUIVALENTS

The following table presents a summary of Cash and cash equivalents as of March 31, 2016 and December 31, 2015:

	March 31,		December 31,
	2016		2015
		(in millions)
Cash	$	57	$	15
Marketable securities		1,540		–
Total cash and cash equivalents	$	1,597	$	15

On March 30, 2016, the Company borrowed $1.55 billion on its revolving credit facility with the proceeds invested in marketable securities.  The $1.55 billion borrowing was repaid on April 1, 2016.  For related discussion see Note 10 to the unaudited condensed consolidated financial statements included in this Quarterly Report.

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Reduction In Workforce

3 Months Ended

Mar. 31, 2016

Reduction In Workforce [Abstract]

Reduction In Workforce

(3) REDUCTION IN WORKFORCE

In January 2016, the Company announced a 40% workforce reduction of approximately 1,100 employees as a result of lower anticipated drilling activity.  This reduction was substantially complete as of March 31, 2016.  The following table presents a summary of the restructuring charges for the three months ended March 31, 2016:

	For the three months
	ended March 31, 2016
	(in millions)
Severance (including payroll taxes)	$	42
Stock-based compensation		18
Benefits		3
Outplacement services, other		1
Total restructuring charges (1)	$	64

(1) Total restructuring charges were $61 million and $3 million for the Company’s E&P and Midstream segments, respectively.

As of March 31, 2016, the Company recorded a liability of $24 million for severance payments (including payroll taxes) which is reflected in accounts payable on the condensed consolidated balance sheets.  A substantial portion of this liability will be paid in April 2016.

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Acquisitions And Divestitures

3 Months Ended

Mar. 31, 2016

Acquisitions And Divestitures [Abstract]

Acquisitions And Divestitures

(4) ACQUISITIONS AND DIVESTITURES

In May 2015, the Company sold conventional oil and gas assets located in East Texas and the Arkoma Basin for approximately $211 million.  The net book value of these assets was primarily in the full cost pool and was held in the E&P segment as of the closing date.  The proceeds from the transaction were used to reduce the Company’s debt.  Approximately $205 million of the proceeds received were recorded as a reduction of the capitalized costs of the Company’s natural gas and oil properties in the United States pursuant to the full cost method of accounting.

In April 2015, the Company sold its gathering assets located in Bradford and Lycoming counties in northeast Pennsylvania to Howard Midstream Energy Partners, LLC for an adjusted sales price of approximately $489 million.  The net book value of these assets was $206 million and was held in the Midstream segment as of the closing date.  A gain on sale of $283 million was recognized and is included in gain on sale of assets, net on the unaudited condensed consolidated statement of operations.  The assets include approximately 100 miles of natural gas gathering pipelines, with nearly 600 million cubic feet per day of capacity.  The proceeds from the transaction were used to substantially repay borrowings under the Company’s $500 million term loan facility that would have matured in December 2016.  

In January 2015, the Company completed an acquisition of certain natural gas and oil assets including approximately 46,700 net acres in northeast Pennsylvania from WPX Energy, Inc. for an adjusted purchase price of $270 million (the “WPX Property Acquisition”).  This acreage was producing approximately 50 million net cubic feet of gas per day from 63 operated horizontal wells as of December 2014.  As part of this transaction, the Company assumed firm transportation capacity of 260 million cubic feet of gas per day predominantly on the Millennium pipeline.  The firm transport is being amortized over 19 years. As of March 31, 2016 and December 31, 2015 the Company has amortized $10 million and $8 million, respectively.  This transaction was funded with the revolving credit facility and was accounted for as a business combination.

In January 2015, the Company completed an acquisition in which the Company’s subsidiary acquired certain natural gas and oil assets from Statoil ASA covering approximately 30,000 acres in West Virginia and southwest Pennsylvania comprising approximately 20% of Statoil’s interests in that acreage for $357 million, (the “Statoil Property Acquisition”).  All of these assets are also assets in which the Company has acquired interests under the Chesapeake Property Acquisition, as defined below.  This transaction was funded with the revolving credit facility and was accounted for as a business combination.  The Company allocated approximately $357 million of the purchase price to natural gas and oil properties, based on the respective fair values of the assets acquired.

In December 2014, the Company completed an acquisition of certain oil and gas assets from Chesapeake Energy Corporation covering approximately 413,000 net acres in West Virginia and southwest Pennsylvania targeting natural gas, natural gas liquids (“NGLs”) and crude oil contained in the Upper Devonian, Marcellus and Utica Shales for approximately $5.0 billion (the “Chesapeake Property Acquisition”).  The transaction was temporarily financed using a $4.5 billion 364-day senior unsecured bridge term loan credit facility and a $500 million two-year unsecured term loan.  The Company repaid all principal and interest outstanding on the $4.5 billion bridge facility in January 2015 after permanent financing was finalized and, as a result, expensed $47 million of short-term unamortized debt issuance costs related to the bridge facility in January 2015 recognized in other interest charges on the unaudited condensed consolidated statement of operations.  The term loan facility was repaid in full in April 2015 with proceeds from the divestiture of the Company’s northeastern Pennsylvania gathering assets and borrowings under the revolving credit facility.

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Natural Gas And Oil Properties

3 Months Ended

Mar. 31, 2016

Natural Gas And Oil Properties [Abstract]

Natural Gas And Oil Properties

(5) NATURAL GAS AND OIL PROPERTIES

The Company utilizes the full cost method of accounting for costs related to the exploration, development and acquisition of natural gas and oil properties.  Under this method, all such costs (productive and nonproductive), including salaries, benefits and other internal costs directly attributable to these activities are capitalized on a country-by-country basis and amortized over the estimated lives of the properties using the units-of-production method. These capitalized costsare subject to a ceiling test that limits such pooled costs, net of applicable deferred taxes, to the aggregate of the present value of future net revenues attributable to proved natural gas, oil and NGL reserves discounted at 10%  (standardized measure) plus the lower of cost or market value of unproved properties. Any costs in excess of the ceiling are written off as a non-cash expense. The expense may not be reversed in future periods, even though higher natural gas, oil and NGL prices may subsequently increase the ceiling. Companies using the full cost method are required to use the average quoted price from the first day of each month from the previous 12 months, including the impact of derivatives qualifying as cash flow hedges, to calculate the ceiling value of their reserves.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $2.40 per MMBtu, West Texas Intermediate oil of $42.77 per barrel and NGLs of $5.76 per barrel, adjusted for market differentials, the Company’s net book value of its United States natural gas and oil properties exceeded the ceiling by $641 million(net of tax) at March 31, 2016 and resulted in a non-cash ceiling test impairment. The Company had no hedge positions accounted for as cash flow hedges as of March 31, 2016. Decreases in market prices as well as changes in production rates, levels of reserves, evaluation of costs excluded from amortization, future development costs and production costs could result in future ceiling test impairments.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $3.88 per MMBtu, West Texas Intermediate oil of $79.21 per barrel and NGLs of $16.38 per barrel, adjusted for market differentials, the net book value of the Company’s United States natural gas and oil properties did not exceed the ceiling amount and did not result in a ceiling test impairment at March 31, 2015. Cash flow hedges of natural gas production in place increased the ceiling amount by approximately $45 million as of March 31, 2015.In the second, third and fourth quarters of 2015, the Company’s net book value of its United States natural gas and oil properties exceeded the ceiling by approximately $944 million (net of tax) at June 30, 2015, $1,746 million (net of tax) at September 30, 2015 and $1,586 million (net of tax) at December 31, 2015,resulting in non-cash ceiling test impairments in each quarter.

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Earnings Per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share

(6) EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income (loss) attributable to common stock by the weighted average number of common shares outstanding during the reportable period.  The diluted earnings per share calculation adds to the weighted average number of common shares outstanding: the incremental shares that would have been outstanding assuming the exercise of dilutive stock options, the vesting of unvested restricted shares of common stock and performance units and the assumed conversion of mandatory convertible preferred stock. An antidilutive impact is an increase in earnings per share or a reduction in net loss per share resulting from the conversion, exercise, or contingent issuance of certain securities.

In January 2015, the Company completed concurrent underwritten public offerings of 30,000,000 shares of its common stock and 34,500,000 depositary shares (both share counts include shares issued as a result of the underwriters exercising their options to purchase additional shares). The common stock offering was priced at $23.00 per share. Net proceeds, after underwriting discount and expenses, from the common stock offering were approximately $669 million. Net proceeds, after underwriting discount and expenses, from the depositary share offering were approximately $1.7 billion. Each depositary share represents a 1/20th interest in a share of the Company’s mandatory convertible preferred stock, with a liquidation preference of $1,000 per share (equivalent to a $50 liquidation preference per depositary share). The proceeds from the offerings were used to partially repay borrowings under the Company’s $4.5 billion 364-day bridge facility with the remaining balance of the bridge facility fully repaid with proceeds from the Company’s January 2015 public offering of $2.2 billion in long-term senior notes.

The mandatory convertible preferred stock entitles the holder to a proportional fractional interest in the rights and preferences of the convertible preferred stock, including conversion, dividend, liquidation and voting rights. Unless converted earlier at the option of the holders, on or around January 15, 2018 each share of convertible preferred stock will automatically convert into between 37.0028 and 43.4782 shares of the Company’s common stock (and, correspondingly, each depositary share will convert into between 1.85014 and 2.17391 shares of the Company’s common stock), subject to customary anti-dilution adjustments, depending on the volume-weighted average price of the Company’s common stock over a 20 trading day averaging period immediately prior to that date.

The mandatory convertible preferred stock has the non-forfeitable right to participate on an as-converted basis at the conversion rate then in effect in any common stock dividends declared and as such, is considered a participating security.  Accordingly, it is included in the computation of basic and diluted earnings per share, pursuant to the two-class method. In the calculation of basic earnings per share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company’s participating securities do not participate in undistributed net losses because they are not contractually obligated to do so.

On March 16, 2016, the Company declared its quarterly dividend, payable to holders of the mandatory convertible preferred stock, and announced that it would pay the dividend in common stock, in lieu of cash, to the extent permitted by the certificate of designations for the Series B preferred stock.  The Company issued 3,024,737shares of common stock on April 15, 2016 in payment of the dividend.

The following table presents the computation of earnings per share for the three months ended March 31, 2016 and 2015:

	For the three months ended
	March 31,
	2016		2015
	(in millions, except share/per share amounts)
Net income (loss)	$	(1,132)	$	78
Mandatory convertible preferred stock dividend		27		25
Net income (loss) attributable to shareholders		(1,159)		53
Participating securities - mandatory convertible preferred stock		–		7
Net income (loss) attributable to common stock	$	(1,159)	$	46
Number of common shares:
Weighted average outstanding		382,870,847		375,444,030
Issued upon assumed exercise of outstanding stock options (1)		–		–
Effect of issuance of non-vested restricted common stock (2)		–		133,634
Effect of issuance of non-vested performance units (3)		–		390
Effect of issuance of mandatory convertible preferred stock (4)		–		–
Effect of declaration of preferred stock dividends (5)		–		–
Weighted average and potential dilutive outstanding		382,870,847		375,578,054
Earnings (loss) per common share:
Basic	$	($3.03)	$	0.12
Diluted	$	($3.03)	$	0.12

(1) Due to the net loss for the three months ended March 31, 2016, the unvested stock options were not recognized in diluted earnings per share calculations as they would be antidilutive. Options for 5,732,521 shares and 3,704,089 shares were excluded from the calculation of diluted shares for the three months ended March 31, 2016 and 2015, respectively, because they would have had an antidilutive effect.

(2) Due to the net loss for the three months ended March 31, 2016, the unvested share-based payments were not recognized in diluted earnings per share calculations as they would be antidilutive.  The calculation excluded5,779,820 sharesand1,916,645 shares of restricted stock for the three months ended March 31, 2016 and 2015, respectively, because they would have had an antidilutive effect.

(3) For the three months ended March 31, 2016, 297,297 shares of performance units were excluded from the calculation of diluted earnings per share as they would be antidilutive.

(4) For the three months ended March 31, 2016 and 2015, 74,999,895 and 58,333,252, respectively, of weighted average common shares issuable upon the assumed conversion of the mandatory convertible preferred stock were excluded from the diluted earnings per share calculation as they would be antidilutive.

(5) Due to the net loss for the three months ended March 31, 2016, 3,024,737 shares ofcommon stockdeclared as preferred stock dividends were excluded from the diluted earnings per share calculations as they would have had an antidilutive effect.

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Derivatives And Risk Management

3 Months Ended

Mar. 31, 2016

Derivatives And Risk Management [Abstract]

Derivatives And Risk Management

(7) DERIVATIVES AND RISK MANAGEMENT

The Company is exposed to volatility in market prices and basis differentials for natural gas, oil and NGLs which impacts the predictability of its cash flows related to the sale of those commodities.  These risks are managed by the Company’s use of certain derivative financial instruments.  As of March 31, 2016, the Company’s derivative financial instruments consisted of fixed price swaps, sold call options, purchased put options and interest rate swaps.  The Company also had basis swaps and sold call options as of December 31, 2015.  The basis swaps settled in the first quarter of 2016. A description of the Company’s derivative financial instruments is provided below:

Fixed price swaps	The Company receives a fixed price for the contract and pays a floating market price to the counterparty.
Sold call options	The Company sells call options in exchange for a premium.  If the market price exceeds the strike price of the call option  at the time of settlement, the Company pays the counterparty such excess on sold call options. If the market price settles below the call’s strike price, no payment is due from either party.
Purchased put options	The Company purchases put options from the counterparty by payment of a cash premium.  If the market price is lower than the put’s strike price at the time of settlement, the Company receives from the counterparty such difference on purchased put options.  If the market price settles above the put’s strike price, no payment is due from either party.
Basis swaps	Arrangements that guarantee a price differential for natural gas from a specified delivery point.  The Company receives a payment from the counterparty if the price differential is greater than the stated terms of the contract and pays the counterparty if the price differential is less than the stated terms of the contract.
Interest rate swaps	Interest rate swaps are used to fix or float interest rates on existing or anticipated indebtedness. The purpose of these instruments is to manage the Company’s existing or anticipated exposure to unfavorable interest rate changes.

The Company utilizes counterparties for its derivative instruments that it believes are credit-worthy at the time the transactions are entered into and the Company closely monitors the credit ratings of these counterparties. Additionally, the Company performs both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. However, the events in the financial markets in recent years demonstrate there can be no assurance that a counterparty will be able to meet its obligations to the Company.

The following table provides information about the Company’s financial instruments that are sensitive to changes in commodity prices and that are used to protect the Company’s exposure.  None of the financial instruments below are designated for hedge accounting treatment.  The table presents the notional amount in Bcf, the weighted average contract prices and the fair value by expected maturity dates as of March 31, 2016.

		Weighted Average Price per MMBtu
	Volume (Bcf)	Swaps		Purchased Puts		Sold Calls		Fair value at March 31, 2016 ($ in millions)
Natural Gas:
Fixed Price Swaps:
2016	64	$	2.48	$	–	$	–	$	20
Purchased Put Options:
2016	43	$	–	$	2.35	$	–	$	15
Sold Call Options:
2016	90	$	–	$	–	$	5.00	$	–
2017	86	$	–	$	–	$	3.25	$	(16)
2018	63	$	–	$	–	$	3.50	$	(12)
2019	52	$	–	$	–	$	3.50	$	(13)
2020	32	$	–	$	–	$	3.75	$	(9)

The balance sheet classification of the assets related to derivative financial instruments (none of which are designated for hedge accounting) are summarized below as of March  31, 2016  and December 31, 2015:

	Derivative Assets
	Balance Sheet Classification		Fair Value
			March 31, 2016		December 31, 2015
		(in millions)
Basis swaps	Derivative assets		$	–	$	3
Fixed price swaps	Derivative assets			20		–
Purchased put options	Derivative assets			15		–
Total derivative assets			$	35	$	3
	Derivative Liabilities
	Balance Sheet Classification		Fair Value
			March 31, 2016		December 31, 2015
			(in millions)
Sold call options	Derivative liabilities		$	5	$	–
Interest rate swaps	Derivative liabilities			3		3
Sold call options	Other long-term liabilities			45		–
Interest rate swaps	Other long-term liabilities			5		2
Total derivative liabilities			$	58	$	5

At March 31, 2016, the net fair value of the Company’s financial instruments related to natural gas was a  $15 millionliability.  The net fair value of the Company’s interest rate swaps was an $8 million liability at March 31, 2016.

Derivative Contracts not Designated for Hedge Accounting

As of March 31, 2016, the Company did not have any positions designated for hedge accounting treatment.  Gains and losses on derivatives that are not designated for hedge accounting treatment, or that do not meet hedge accounting requirements, are recorded as a component of gain (loss) on derivatives on the condensed consolidated statements of operations.   Accordingly, the gain (loss) on derivatives component of the statements of operations reflects the gains and losses on both settled and unsettled derivatives. The Company calculates gains and losses on settled derivatives as the summation of gains and losses on positions which have settled within the reporting period.  Only the settled gains and losses are included in the Company’s realized commodity price calculations.

The Company is a party to interest rate swaps that were entered into to mitigate the Company’s exposure to volatility in interest rates. The interest rate swaps have a notional amount of $170 million and expire in June 2020.The Company did not designate the interest rate swaps for hedge accounting.  Changes in the fair value of the interest rate swaps are included in gain (loss) on derivatives in the unaudited condensed consolidated statements of operations.

The following tables summarize the before tax effect of fixed price swaps, basis swaps, sold call options, purchased put options and interest rate swaps not designated for hedge accounting on the unaudited condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015:

		Gain (Loss) on Derivatives,
		Unsettled
		Recognized in Earnings
	Consolidated Statement of Operations	For the three months ended
	Classification of Gain (Loss) on	March 31,
Derivative Instrument	Derivatives, Unsettled	2016		2015
		(in millions)
Basis swaps	Gain (Loss) on Derivatives	$	(3)	$	(8)
Sold call options	Gain (Loss) on Derivatives		(50)		8
Purchased put options	Gain (Loss) on Derivatives		15		–
Fixed price swaps	Gain (Loss) on Derivatives		20		(18)
Interest rate swaps	Gain (Loss) on Derivatives		(3)		(3)
Total loss on unsettled derivatives		$	(21)	$	(21)
		Gain (Loss)
		on Derivatives, Settled (1)
		Recognized in Earnings
	Consolidated Statement of Operations	For the three months ended
	Classification of Gain (Loss)	March 31,
Derivative Instrument	on Derivatives, Settled (1)	2016		2015
		(in millions)
Basis swaps	Gain (Loss) on Derivatives	$	4	$	(6)
Fixed price swaps	Gain (Loss) on Derivatives		4		42
Interest rate swaps	Gain (Loss) on Derivatives		(1)		(1)
Total gain on settled derivatives (2)		$	7	$	35
Total gain (loss) on derivatives		$	(14)	$	14

(1) The Company calculates gain (loss) on derivatives, settled, as the summation of gains and losses on positions that have settled within the period.

(2) These amounts are included, along with gas sales revenues, in the calculation of the Company’s realized natural gas price.

Derivative Contracts Designated for Hedge Accounting

All derivatives are recognized in the balance sheet as either an asset or liability and are measured at fair value other than transactions for which normal purchase/normal sale is applied. Certain criteria must be satisfied in order for derivative financial instruments to be designated for hedge accounting.  Accounting guidance for qualifying hedges allows an unsettled derivative’s unrealized gains and losses to be recorded either in earnings or as a component of other comprehensive income until settled.  In the period of settlement, the Company recognizes the gains and losses from these qualifying hedges in operating revenues.  In 2015, the Company had certain fixed price swaps that were designated for hedge accounting.  For the three months ended March 31, 2015, the Company reported a gain in other comprehensive income of $24 million (pre-tax) related to the effective portion of our unsettled fixed price swaps.  The ineffective portion of those fixed price swaps was recognized in earnings and had an inconsequential impact to the unaudited condensed consolidated statement of operations for the three ended March 31, 2015.  During the first quarter of 2015, a gain of $42 million (pre-tax) on settled fixed price swaps was transferred from other comprehensive income into gas sales revenues in the consolidated statements of operations.  As of March 31, 2016, the Company did not have any positions designated for hedge accounting treatment.

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Reclassifications From Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2016

Reclassifications From Accumulated Other Comprehensive Income [Abstract]

Reclassifications From Accumulated Other Comprehensive Income

(8) RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME

The following tables detail the components of accumulated other comprehensive income (loss) and the related tax effects for the three months ended March  31, 2016:

	For the three months ended
	March 31, 2016
	Pension and Other Postretirement		Foreign Currency		Total
	(in millions) (1)
Beginning balance at December 31, 2015	$	(25)	$	(23)	$	(48)
Other comprehensive income before reclassifications		–		3		3
Amounts reclassified from other comprehensive income (loss) (2)		1		–		1
Net current-period other comprehensive loss		1		3		4
Ending balance at March 31, 2016	$	(24)	$	(20)	$	(44)

(1) All amounts are net of tax.

(2) See separate table below for details about these reclassifications.

Details about Accumulated Other Comprehensive Income	Affected Line Item in the Consolidated Statement of Operations		Amount Reclassified from Accumulated Other Comprehensive Income
			For the three months ended March 31, 2016
			(in millions)
Pension and other postretirement
Amortization of prior service cost and net loss (1)	General and administrative expenses	$	2
	Provision for income taxes		1
Total reclassifications for the period	Net loss	$	1

(1) See Note 12 for additional details regarding the Company’s retirement and employee benefit plans.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Measurements [Abstract]

Fair Value Measurements

(9) FAIR VALUE MEASUREMENTS

The carrying amounts and estimated fair values of the Company’s financial instruments as of March  31, 2016 and December 31, 2015 were as follows:

	March 31, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(in millions)
Cash and cash equivalents	$	1,597	$	1,597	$	15	$	15
Credit facility		1,852		1,852		116		116
Term loan facility		748		748		747		747
Senior notes		3,843		2,729		3,842		2,651
Derivative instruments, net		(23)		(23)		(2)		(2)

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, other current assets and current liabilities on the unaudited condensed consolidated balance sheets approximate fair value because of their short-term nature. For debt and derivative instruments, the following methods and assumptions were used to estimate fair value:

Debt: The fair values of the Company’s senior notes were based on the market value of the Company’s publicly traded debt as determined based on the yield of the Company’s senior notes.

The carrying values of the borrowings under the Company’s unsecured revolving credit and term loan facilities approximate fair value because the interest rate is variable and reflective of market rates. The Company considers the fair value of its debt to be a Level 2 measurement on the fair value hierarchy. 

Derivative Instruments:The fair value of all derivative instruments is the amount at which the instrument could be exchanged currently between willing parties. The amounts are based on quoted market prices, best estimates obtained from counterparties and an option pricing model, when necessary, for price option contracts.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:

Level 1 valuations - Consist of unadjusted quoted prices in active markets for identical assets and liabilities and have the highest priority.

Level 2 valuations - Consist of quoted market information for the calculation of fair market value.

Level 3 valuations - Consist of internal estimates and have the lowest priority.

The Company has classified its derivatives into these levels depending upon the data utilized to determine their fair values. The Company’s fixed price swaps (Level 2) are estimated using third-party discounted cash flow calculations using the NYMEX futures index. The Company utilized discounted cash flow models for valuing its interest rate derivatives (Level 2). The net derivative values attributable to the Company's interest rate derivative contracts as of March 31, 2016 are based on (i) the contracted notional amounts, (ii) active market-quoted London Interbank Offered Rate (“LIBOR”) yield curves and (iii) the applicable credit-adjusted risk-free rate yield curve. The Company’s sold call options and purchased put options (Level 3) are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contract terms, including maturity, and market parameters, including assumptions of the NYMEX futures index, interest rates, volatility and credit worthiness.  The Company’s basis swaps (Level 3) are estimated using third-party calculations based upon forward commodity price curves.

Inputs to the Black-Scholes model, including the volatility input, which is the significant unobservable input for Level 3 fair value measurements, are obtained from a third-party pricing source, with independent verification of the most significant inputs on a monthly basis. An increase (decrease) in volatility would result in an increase (decrease) in fair value measurement, respectively. However, such changes would not have a significant impact.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in millions):

	March 31, 2016
	Fair Value Measurements Using:
	Quoted Prices		Significant		Significant
	in Active		Other		Unobservable
	Markets		Observable Inputs		Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Fixed price swap assets	$	–	$	20	$	–	$	20
Purchased put option assets		–		–		15		15
Interest rate swap liabilities		–		(8)		–		(8)
Sold call option liabilities		–		–		(50)		(50)
Total	$	–	$	12	$	(35)	$	(23)
	December 31, 2015
	Fair Value Measurements Using:
	Quoted Prices		Significant		Significant
	in Active		Other		Unobservable
	Markets		Observable Inputs		Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Basis swap assets	$	–	$	–	$	3	$	3
Interest rate swap liabilities		–		(5)		–		(5)
Total	$	–	$	(5)	$	3	$	(2)

The table below presents reconciliations for the change in net fair value of derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March  31, 2016 and 2015.  The fair values of Level 3 derivative instruments are estimated using proprietary valuation models that utilize both market observable and unobservable parameters. Level 3 instruments presented in the table consist of net derivatives valued using pricing models incorporating assumptions that, in the Company’s judgment, reflect reasonable assumptions a marketplace participant would have used as of March  31, 2016 and 2015.

	For the three months ended
	March 31,
	2016		2015
	(in millions)
Balance at beginning of period	$	3	$	(8)
Total gains (losses):
Included in earnings		(34)		(6)
Purchases, issuances, and settlements:
Settlements		(4)		6
Transfers into/out of Level 3		–		–
Balance at end of period	$	(35)	$	(8)
Change in losses included in earnings relating to derivatives still held as of March 31	$	(38)	$	–

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Debt

3 Months Ended

Mar. 31, 2016

Debt [Abstract]

Debt

(10) DEBT

The components of debt as of March 31, 2016  and December 31, 2015 consisted of the following:

		March 31, 2016
		(in millions)
	Debt Instrument		Unamortized Issuance Cost		Unamortized Debt Discount		Total
Short-term debt:
7.15% Senior Notes due May 2018	$	1	$	–	$	–	$	1
Total short-term debt	$	1	$	–	$	–	$	1
Long-term debt:
Variable rate (4.154% at March 31, 2016) credit facility, expires December 2018		1,852		–		–		1,852
Variable rate (2.025% at March 31, 2016) term loan facility, due November 2018		750		(2)		–		748
7.35% Senior Notes due October 2017		15		–		–		15
7.125% Senior Notes due October 2017		25		–		–		25
3.3% Senior Notes due January 2018		350		(2)		–		348
7.5% Senior Notes due February 2018		600		(2)		–		598
7.15% Senior Notes due May 2018		26		–		–		26
4.05% Senior Notes due January 2020		850		(5)		–		845
4.10% Senior Notes due March 2022		1,000		(5)		(1)		994
4.95% Senior Notes due January 2025		1,000		(7)		(2)		991
Total long-term debt	$	6,468	$	(23)	$	(3)	$	6,442
Total debt	$	6,469	$	(23)	$	(3)	$	6,443

		December 31, 2015
		(in millions)
	Debt Instrument		Unamortized Issuance Cost		Unamortized Debt Discount		Total
Short-term debt:
7.15% Senior Notes due May 2018	$	1	$	–	$	–	$	1
Total short-term debt	$	1	$	–	$	–	$	1
Long-term debt:
Variable rate (1.886% at December 31, 2015) credit facility, expires December 2018		116		–		–		116
Variable rate (1.775% at December 31, 2015) term loan facility, due November 2018		750		(3)		–		747
7.35% Senior Notes due October 2017		15		–		–		15
7.125% Senior Notes due October 2017		25		–		–		25
3.3% Senior Notes due January 2018		350		(2)		–		348
7.5% Senior Notes due February 2018		600		(2)		–		598
7.15% Senior Notes due May 2018		26		–		–		26
4.05% Senior Notes due January 2020		850		(5)		(1)		844
4.10% Senior Notes due March 2022		1,000		(5)		(1)		994
4.95% Senior Notes due January 2025		1,000		(7)		(2)		991
Total long-term debt	$	4,732	$	(24)	$	(4)	$	4,704
Total debt	$	4,733	$	(24)	$	(4)	$	4,705

Credit Facility

The Company’s revolving credit facility entered into in December 2013, provides a borrowing capacity ofup to $2.0 billion, reduced for any outstanding letters of credit, and matures inDecember 2018,with options for twoone-year extensions with participating lender approval.  The Company had $148 million of letters of credit outstanding as of March 31, 2016.  The borrowing capacity available under the revolving credit facility may be increased by  $500  million upon the Company’s agreement with its participating lenders. The interest rate on the revolving credit facility is calculated based upon the Company’s public debt ratings from Standard & Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”) and was 200.0 basis points over LIBOR as of March 31, 2016.  Since the adjustment ceiling per the terms of the revolving credit facility is 200.0 basis points, the interest rate sensitivity on the Company’s revolving credit facility currently correlates directly to changes in LIBOR.  On March 30, 2016, the Company borrowed $1.55 billion on the revolving credit facility.  On April 1, 2016, the Company repaid the $1.55 billion borrowingin full.  As of March 31, 2016, the Company had $1.9  billion drawn on the credit facility and $0.1 billion in letters of credit.

The revolving credit facility and the term loan facility are unsecured and are not guaranteed by any subsidiaries of the Company.  The revolving credit facility and the term loan facility contain covenants imposing certain restrictions on the Company, including a financial covenant under which Southwestern may not issue total debt in excess of 60% of its total adjusted book capital. This financial covenant with respect to capitalization percentages excludes the effects of any full cost ceiling impairments, certain hedging activities, unamortized issuance cost, unamortized debt discount and the Company’s pension and other postretirement liabilities.  As of March 31, 2016, the Company’s adjusted capital structure was 45% debt and 55% equity and was in compliance with the covenants of its revolvingcredit facility, term loan facility and other debt agreements. 

Term Facility

In November 2015, the Company entered into a $750 million unsecured three-year term loan credit agreement with various tenders that was utilized to repay borrowings under the revolving credit facility.  The interest rate on the term loan facility is determined based upon the Company’s public debt ratings from S&P and Moody’s and was 162.5 basis points over the London Interbank Offered Rate (“LIBOR”) as of March 31, 2016.  The term loan facility requires prepayment under certain circumstances from the net cash proceeds of sales of equity or certain assets and borrowings outside the ordinary course of business.

Public Offering of Senior Notes

In January 2015, the Company completed a public offering of $350 million aggregate principal amount of its 3.30% senior notes due 2018 (the “2018 Notes”), $850 million aggregate principal amount of its 4.05% senior notes due 2020 (the “2020 Notes”) and $1 billion aggregate principal amount of its 4.95% senior notes due 2025 (the “2025 Notes” together with the 2018 and 2020 Notes, the “Notes”), with net proceeds from the offering totaling approximately $2.2 billion after underwriting discounts and offering expenses.  The proceeds from this offering were used to repay the remaining principal and interest outstanding under the Company’s $4.5 billion 364-day bridge term loan facility, which was first reduced with proceeds from the Company’s concurrent underwritten public offerings of common and preferred stock, and were also used to repay a portion of amounts outstanding under the Company’s revolving credit facility.  As a result of this repayment, the Company expensed $47 million of short-term unamortized debt issuance costs related to the bridge facility in January 2015 recognized in other interest charges on the unaudited condensed consolidated statement of operations for the three months ended March 31, 2015.  The Notes were sold to the public at a price of 99.949% of their face value for the 2018 Notes, 99.897% of their face value for the 2020 Notes and 99.782% of their face value for the 2025 Notes.  The interest rates on the Notes is determined based upon the Company’s public debt ratings from S&P and Moody’s.  Downgrades from either rating agency increase interest costs by 25.0 basis points per downgrade level on the following semi-annual bond interest payment.  In February 2016, S&P and Moody’s downgraded the Company’s credit ratings, increasing the interest rates on these notes by 125.0 basis points effective July 2016.  As a result of the downgrade, the Company’s interest expense for 2016 will increase $14 million.  The first higher interest rate coupon payment to bondholders will be paid in January 2017.

Commercial Paper

In April 2015, the Company entered into a commercial paper program which allowed it to issue up to $2.0 billion in commercial paper provided that borrowings from its commercial paper program combined with outstanding borrowings under itsrevolving credit facility, not exceed $2.0 billion. The commercial paper issuance had terms of up to 397 days and carried interest at rates agreed upon at the time of each issuance.As of March 31, 2016, the Company had nooutstanding issuances under its commercial paper program and had no plans of utilizing the commercial paper market for the remainder of 2016.

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Commitments And Contingencies

3 Months Ended

Mar. 31, 2016

Commitments And Contingencies [Abstract]

Commitments And Contingencies

(11) COMMITMENTS AND CONTINGENCIES

Operating Commitments and Contingencies

As of March 31, 2016, the Company’s contractual obligations for demand and similar charges under firm transportation and gathering agreements to guarantee access capacity on natural gas and liquids pipelines and gathering systems totaled approximately $8.6 billion, $3.3 billion of which related to access capacity on future pipeline and gathering infrastructure projects that still require the granting of regulatory approvals and additional construction efforts. The Company also had guarantee obligations of up to $861 million of that amount.

Environmental Risk

The Company is subject to laws and regulations relating to the protection of the environment. Environmental and cleanup related costs of a non-capital nature are accrued when it is both probable that a liability has been incurred and when the amount can be reasonably estimated. Management believes any future remediation or other compliance related costs will not have a material effect on the financial position or results of operations of the Company.

Litigation

The Company is subject to various litigation, claims and proceedings that have arisen in the ordinary course of business, such as for alleged breaches of contract, miscalculation of royalties, and pollution, contamination or nuisance. Management believes that such litigation, claims and proceedings, individually or in aggregate and after taking into account insurance, are not likely to have a material adverse impact on the Company’s financial position, results of operations or cash flows. Many of these matters are in early stages, so the allegations and the damage theories have not been fully developed, and are all subject to inherent uncertainties; therefore, management’s view may change in the future. If an unfavorable final outcome were to occur, there exists the possibility of a material impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.

Tovah Energy 

In February 2009, one of the Company’s subsidiaries was added as a defendant in a case then styled Tovah Energy, LLC and Toby Berry-Helfand v. David Michael Grimes, et, al., pending in the 273rd District Court in Shelby County, Texas. By the time of trial in December 2010, Ms. Berry-Helfand (the only remaining plaintiff) alleged that, in 2005, she provided the Company’s subsidiary with proprietary data regarding two prospects in the James Lime formation pursuant to a confidentiality agreement and that the Company’s subsidiary refused to return the proprietary data to the plaintiff, subsequently acquired leases based upon such proprietary data and profited therefrom. Among other things, she alleged various statutory and common law claims, including, but not limited to, claims of misappropriation of trade secrets, violation of the Texas Theft Liability Act, breach of fiduciary duty and confidential relationships, various fraud based claims and breach of contract, including a claim of breach of a purported right of first refusal on all interests acquired by the Company’s subsidiary between February 2005 and February 2006. She also sought disgorgement of the Company’s subsidiary’s profits. A former associate of the plaintiff intervened in the matter claiming to have helped develop the prospect years earlier.

The jury found in favor of the plaintiff and the intervenor with respect to all of the statutory and common law claims and awarded $11 million in compensatory damages but no special, punitive or other damages. Separately, the jury determined that the Company’s subsidiary’s profits for purposes of disgorgement, if ordered as a remedy, were $382 million. (Disgorgement of profits is an equitable remedy determined by the judge, and it is within the judge’s discretion to award none, some or all of unlawfully obtained profits.) In August 2011, a judgment was entered pursuant to which the plaintiff and the intervenor were entitled to recover approximately $11 million in actual damages and approximately $24 million in disgorgement as well as prejudgment interest and attorneys’ fees, which currently are estimated to be up to $9 million, and all costs of court of the plaintiff and intervenor.

Both sides appealed and in July 2013, the Tyler Court of Appeals ordered that (1) the judgment awarding the plaintiff and the intervenor $24 million as disgorgement of illicit gains be reversed and judgment rendered that they take nothing, (2) the award of $11 million for actual damages, insofar as it is based on the jury’s findings of breach of fiduciary duty, fraud, breach of contract, and theft of trade secret is reversed and judgment rendered that the plaintiff and the intervenor take nothing under those theories of recovery, (3) the award of $11 million to the plaintiff and the intervenor as damages for misappropriation of trade secrets is affirmed, (4) the case be remanded to the trial court for a determination and award of attorney’s fees for the Company’s subsidiary as the prevailing party under the Texas Theft Liability Act, and (5) in all other respects, the judgment is affirmed. All parties petitioned for rehearing. The Tyler Court of Appeals denied rehearing in November 2013.

The Company’s subsidiary filed a petition for review in the Supreme Court of Texas in February 2014. The plaintiff and the intervenor filed a cross-petition for review in April 2014, but conditioned their filing on the court’s granting the Company’s subsidiary’s petition for review; i.e., if the court denies the Company’s subsidiary’s petition for review, then the plaintiff and the intervenor are not seeking further review of the court of appeals’ judgment.  The Supreme Court granted the parties’ petitions and heard oral argument on the case in October 2015 but has not yet issued a decision.Based on the Company’s understanding and judgment of the facts and merits of this case, including appellate matters, and after considering the advice of counsel, the Company has determined that, although reasonably possible, a materially adverse final outcome to this action is not probable. As such, the Company has not accrued any amounts with respect to this action. If the Supreme Court affirms all aspects of the court of appeals’ judgment, then the Company’s subsidiary would owe the $11 million in damages, plus interest and attorneys’ fees, offset by any award of attorneys’ fees for its prevailing on the theft count. The Company’s assessment may change in the future depending on the Supreme Court’s decision, and such a re-assessment could lead to the determination that the potential liability is probable and could be material to the Company’s results of operations, financial position or cash flows. 

Arkansas Royalty Litigation

Certain of the Company’s subsidiaries are defendants in three cases, two filed in Arkansas state court in 2010 and 2013 and one in federal court in 2014, on behalf of putative classes of royalty owners on some of the Company’s leases located in Arkansas.  The chief complaint in all three cases is that one of the Company’s subsidiaries underpaid the royalty owners by, among other things, deducting from royalty payments costs for gathering, transportation, and compression of natural gas in excess of what is permitted by the relevant leases.  In September and October 2014 the judges in the two Arkansas state actions entered orders certifying classes of royalty owners who are citizens of Arkansas.  The Company’s subsidiaries have appealed those orders.  Oral argument has not yet been set in either case.

On November 17, 2015, the court in the federal case denied the plaintiff’s motion to certify a class of royalty owners not included in either of the two state cases.  On April 11, 2016, the court certified a broader class that includes Arkansas residents and citizens.  The plaintiff in the federal case presented two alternative damages theories.  Under one theory, plaintiffs have asserted that obligations to affiliates are not “incurred” and therefore the exploration and production subsidiary was not entitled to deduct any post-production costs; the federal court has granted partial summary judgment for the Company’s subsidiaries on this theory.  Under another theory, plaintiffs assert that the gathering and treating rates it deducted from royalty payments exceeded the affiliates’ actual costs or otherwise were not reasonable.  The plaintiffs have not disclosed a specific damage calculation for any putative class, but based on the class representative’s disclosure regarding the calculation of claimed damages, class-wide damages could exceed $100 million.  Although trial previously was set for March 15, 2016, following transfer to a different judge and the certification of the class described above, that trial date has been vacated and no new date set.

In addition, in September 2015 three cases were filed in Arkansas state court on behalf of a total of 248 individually named plaintiffs.  Each case asserts complaints that are in substance virtually identical to the above-described case.  The Company and its subsidiaries have removed two of the cases to federal court, and those cases have been assigned to the court in which the above-described federal case is pending.  All three cases have been stayed.

Management believes that, in all of the above cases, the deductions from royalty payments as calculated are permitted and intends to defend the cases vigorously.  The Company’s assessment may change in the future due to the occurrence of certain events, such as adverse judgments, and such a re-assessment could lead to the determination that the potential liability is probable and could be material to the Company’s results of operations, financial position or cash flows.

Indemnifications

The Company provides certain indemnifications in relation to dispositions of assets.  These indemnifications typically relate to disputes, litigation or tax matters existing at the date of disposition.No liability has been recognized in connection with these indemnifications.

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Pension Plan And Other Postretirement Benefits

3 Months Ended

Mar. 31, 2016

Pension Plan And Other Postretirement Benefits [Abstract]

Pension Plan And Other Postretirement Benefits

(12) PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS

The Company has defined pension and postretirement benefit plans which cover substantially all of the Company’s employees. Net periodic pension costs include the following components for the three months ended March 31, 2016 and 2015:  

	Pension Benefits
	For the three months ended
	March 31,
	2016		2015
	(in millions)
Service cost	$	4	$	4
Interest cost		2		1
Expected return on plan assets		(2)		(2)
Amortization of prior service cost		–		–
Amortization of net loss		–		1
Net periodic benefit cost	$	4	$	4

The Company’s postretirement benefit plan had a net periodic benefit cost of $1 million as of the three months ended March 31, 2016 and 2015. For the three months ended March 31, 2016, the Company has contributed $3 million to the pension and postretirement benefit plans. In January 2016, the Company initiated a reduction in workforce that was effectively completed by the end of the first quarter. As a result of the workforce reduction, the Company continues to evaluate its pension and other postretirement benefit funding requirements and will disclose its funding plans once reasonably determined.

The Company maintains a non-qualified deferred compensation supplemental retirement savings plan (“Non-Qualified Plan”) for certain key employees who may elect to defer and contribute a portion of their compensation, as permitted by the plan. Shares of the Company’s common stock purchased under the terms of the Non-Qualified Plan are presented as treasury stock and totaled 31,269 shares at March 31, 2016 compared to 47,149  shares at December 31, 2015.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(13) STOCK-BASED COMPENSATION

The Company recognized the following amounts in employee stock-based compensation costs for the three months ended March 31, 2016 and 2015:

	For the three months ended
	March 31,
	2016		2015
	(in millions)
Stock-based compensation cost – expensed (1)	$	23	$	6
Stock-based compensation cost – capitalized	$	3	$	5

(1) Includes $18 million related to the reduction in workforce that occurred in the first quarter of 2016.

In January 2016, the Company announced a 40% workforce reduction that was substantially concluded by the end of March 2016.  Affected employees were offered a severance package that included, if applicable, amendments to outstanding equity awards that modified forfeiture provisions on separation from the Company.  As a result, unvested stock-based equity awards became fully vested at the time of separation.  These shares were revalued and recognized immediately as a component of restructuring charges on the Company’s condensed consolidated statements of operations.

As of March 31, 2016,  there was $86 million of total unrecognized compensation cost related to the Company’s unvested stock option grants, restricted stock grants and performance units. This cost is expected to be recognized over a weighted-average period of 3 years.

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2016 and provides information for options outstanding and options exercisable as of March 31, 2016:

	Number		Weighted Average
	of Options		Exercise Price
	(in thousands)		(per share)
Outstanding at December 31, 2015		5,623	$	24.57
Granted		156		8.60
Exercised		–		–
Forfeited or expired		(10)		30.29
Outstanding at March 31, 2016		5,769		24.13
Exercisable at March 31, 2016		2,567	$	36.12

Restricted Stock

The following table summarizes restricted stock activity for the three months ended March 31, 2016 and provides information for unvested shares as of March 31, 2016:  

	Number		Weighted Average
	of Shares		Fair Value
	(in thousands)		(per share)
Unvested shares at December 31, 2015		7,222	$	13.24
Granted		77		8.35
Vested (1)		(1,947)		8.32
Forfeited		(24)		12.11
Unvested shares at March 31, 2016		5,328	$	13.24

(1) Includes 1,887,160 shares related to the reduction in workforce that occurred in the first quarter of 2016.

Equity-Classified Performance Units

The following table summarizes performance unit activity to be paid out in Company stock for the three months ended March 31, 2016 and provides information for unvested units as of March 31, 2016.  The performance units awarded in 2013 and 2014 include a market condition based on Relative Total Shareholder Return (“TSR”) and a performance condition based on the Company's Present Value Index (“PVI”), collectively the “Performance Measures.”The fair value of the TSR market condition of the performance units is based on a Monte Carlo model and is amortized to compensation expense on a straight-line basis over the vesting period of the award. The fair value of the PVI performance condition of the performance units is based on economic analysis for each investment opportunity based upon the expected present value added for each dollar to be invested and amortized to compensation expense on a straight line basis over the vesting period of the award. The performance units awarded in 2015 are based exclusively on TSR.  The grant date fair value is calculated using the Performance Measures and the closing price of the Company’s common stock at the grant date.

	Number		Weighted Average
	of Units (1)		Fair Value
	(in thousands)		(per share)
Unvested units at December 31, 2015		407	$	36.65
Granted (2)		1,061		8.31
Vested (3)		(5)		8.08
Forfeited		(38)		8.08
Unvested units at March 31, 2016		1,425	$	14.47

(1) These amounts reflect the number of performance units granted in thousands. The actual payout of shares may range from a minimum of zero shares to a maximum of two shares contingent upon the actual performance against the Performance Measures.

(2) Excludes 441,450 units in excess of individual award limits subject to shareholder approval of the amended 2013 Incentive Plan at the annual meeting on May 17, 2016.

(3) Includes 5,168units related to the reduction in workforce that occurred in the first quarter of 2016.

Liability-Classified Performance Units

Prior to 2013, certain employees were provided performance units vesting equally over three years, payable in cash.  The payout of these units was based on certain metrics, such as total shareholder return and reserve replacement efficiency, compared to a predetermined group of peer companies and Company goals.  At the end of each performance period, the value of the vested performance units, if any, would bepaid in cash.  In the first quarter of 2016, the Companycompleted the final payout under these performance unit agreements.

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Segment Information

3 Months Ended

Mar. 31, 2016

Segment Information [Abstract]

Segment Information

(14) SEGMENT INFORMATION

The Company’s reportable business segments have been identified based on the differences in products or services provided. Revenues for the E&P segment are derived from the production and sale of natural gas and liquids. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas and liquids volumes and through gathering fees associated with the transportation of natural gas to market.

Summarized financial information for the Company’s reportable segments is shown in the following table. The accounting policies of the segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of the 2015 Annual Report. Management evaluates the performance of its segments based on operating income, defined as operating revenues less operating costs. Income before income taxes, for the purpose of reconciling the operating income amount shown below to consolidated income before income taxes, is the sum of operating income, interest expense, gain (loss) on derivatives, and other loss. The “Other” column includes items not related to the Company’s reportable segments including real estate and corporate items.

	Exploration and			Midstream
	Production			Services			Other			Total
	(in millions)
Three months ended March 31, 2016:
Revenues from external customers	$	343		$	236		$	–		$	579
Intersegment revenues		(7)			385			–			378
Depreciation, depletion and amortization expense		127			16			–			143
Impairment of natural gas and oil properties		1,034			–			–			1,034
Operating income (loss)		(1,160)	(1)		60	(2)		–			(1,100)
Interest expense (3)		14			–			–			14
Other loss, net		(2)			(1)			–			(3)
Loss on derivatives		(13)			(1)			–			(14)
Provision for income taxes (3)		1			–			–			1
Assets		5,538			1,220			1,760	(4)		8,518
Capital investments (5)		120			2			–			122
Three months ended March 31, 2015:
Revenues from external customers	$	660		$	273		$	–		$	933
Intersegment revenues		(5)			665			1			661
Depreciation, depletion and amortization expense		278			15			–			293
Operating income (loss)		78			88			(1)			165
Interest expense (3)		45			7			(1)			51
Other loss, net		(1)			–			–			(1)
Gain (loss) on derivatives		15			–			(1)			14
Provision for income taxes (3)		18			31			–			49
Assets		13,703			1,616			242	(4)		15,561
Capital investments (5)		1,030			138			3			1,171

(1) Operating income (loss) for the E&P segment includes $61 million related to restructuring charges.

(2) Operating income (loss) for the Midstream segment includes $3 million related to restructuring charges.

(3) Interest expense and the provision forincome taxes by segment are an allocation of corporate amounts as they are incurred at the corporate level.

(4) Other assets represent corporate assets not allocated to segments and assets for non-reportable segments.  At March 31, 2016, other assets includes $1.55 billion in marketable securities, which were sold on April 1, 2016 to repay revolver debt.  See Note 2 to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional discussion.

(5) Capital investments includes a  $78 million decrease and an immaterial increase for the three months ended March 31, 2016 and 2015, respectively, relating to the change in accrued expenditures between periods.  E&P capital for the three month period ended March 31, 2015 includes approximately $534 million related to the WPX Property and Statoil Property Acquisitions. Midstream capital for the three months ended March 31, 2015 includes approximately $119 million associated with the intangible asset related to the firm transportation acquired through the WPX Property Acquisition.

Included in intersegment revenues of the Midstream Services segment are $319 million and $576 million for the three months ended March 31, 2016 and 2015, respectively for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, furniture and fixtures and other costs. Corporate general and administrative costs, depreciation expense and taxes other than income are allocated to the segments. Capital investments within the E&P segment include $1 million for the three months ended March 31, 2016 and 2015, related to the Company’s activities in Canada. The Company’s E&P segment assets included $53 million and $71 million at March 31, 2016 and 2015, respectively, related to the Company’s activities in Canada.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Taxes [Abstract]

Income Taxes

(15)  INCOME TAXES

The Company’s effective tax rate was approximately 0% for the three months ended March 31, 2016, primarily as a result of the recognition of a valuation allowance.  A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized.  To assess that likelihood, the Company uses estimates and judgment regarding future taxable income, and considers the tax consequences in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required.  Such evidence can include current financial position, results of operations, both actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business economics of the oil and gas industry. 

Due to the material write-downs of the carrying value of oil and natural gas properties and operating results, the Company is in a net deferred tax asset position.  The Company believes it is more likely than not that these deferred tax assets will not be realizedand recorded a $431 million tax expense for the increase in our valuation allowance.  Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets.  A significant piece of objective negative evidence evaluated is the projected cumulative loss incurred over the three-year period ending December 31, 2016.  Such objective negative evidence limits the ability to consider other subjective positive evidence, such as projections for future growth. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as future expected growth.

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New Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements

(16)  NEW ACCOUNTING PRONOUNCEMENTS

New Accounting Standards Implemented

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30) (“Update 2015-03”), in an effort to simplify presentation of debt issuance costs. Update 2015-03 required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs was not affected by the amendments in this Update. Entities were required to apply the amendments in Update 2015-03 on a retrospective basis, with the balance sheet of each individual period presented adjusted to reflect the period-specific effects of applying the new guidance. In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Interest-Imputation of Interest (Subtopic 835-30) (“Update 2015-15”), which addressed the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements, given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements.  For public entities, Update 2015-03 and Update 2015-15 were effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company adopted this update in the first quarter of 2016 resulting in an immaterial impact on its unaudited condensed consolidated results of operations, financial position and cash flows. At December 31, 2015, the Company had $24 million in unamortized debt expense that was classified as a long-term asset.  As of March 31, 2016, long-term debt included a contra liability of $23 million for unamortized debt expense previously recognized as a long-term asset.

In May 2015, the FASB issued Accounting Standards Update No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (Or Its Equivalent) (“Update 2015-07”), which amends ASC 820, Fair Value Measurement. The standard removes the requirement to categorize within the fair value hierarchy investments for which fair value is measured using the net asset value per share practical expedient and removes certain related disclosure requirements. The amendments in Update 2015-07 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted this update in the first quarter of 2016 resulting in no impact on its unaudited condensed consolidated results of operations, financial position and cash flows.

In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805) (“Update 2015-16”), which seeks to reduce the complexity of amounts recognized in a business combination. The amendments in Update 2015-16 require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in Update 2015-16 require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in Update 2015-16 require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments in Update 2015-16 were effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company adopted this update in the first quarter of 2016 resulting in no impact on its unaudited condensed consolidated results of operations, financial position and cash flows.

In November 2014, the FASB issued Accounting Standards Update No. 2014-16, Derivatives and Hedging – Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (Subtopic 815-15) (“Update 2014-16”), addresses diversity in practice related to the determination of whether derivative features embedded in hybrid instruments issued in the form of a share should be bifurcated and accounted for separately. For public entities, Update 2014-16 was effective for annual reporting periods beginning after December 15, 2015 including interim periods within that reporting period. The Company adopted this update in the first quarter of 2016 resulting in no impact on its unaudited condensed consolidated results of operations, financial position and cash flows.

New Accounting Standards Not Yet Implemented

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Update 2014-09”), which seeks to provide clarity for recognizing revenue. Topic 606 Revenue from Contracts with Customers will supersede the revenue recognition requirement as in Topic 605 Revenue Recognition. Update 2014-09 requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to those goods or services. Entities may apply the amendments in Update 2014-09 either (a) retrospectively to each reporting period presented, and the entity may elect a practical expedient per the update, or (b) retrospectively with the cumulative effect of initially applying Update 2014-09 recognized at the date of initial application – if an entity elects this transition method it also should provide the additional disclosures in reporting periods. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606)(“Update 2015-14”). Deferral of the Effective Date, which finalizes proposed ASU No. 2015-240 of the same name and responds to stakeholders’ request to defer the effective date of the guidance in ASU No. 2014-09. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)(“Updated 2016-08”), which finalized proposed ASU No. 2015-290 of the same name and clarifies the implementation guidance on principal versus agent considerations. For public entities, Update 2014-09, Update 2015-14, and Update 2016-08 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the provisions of Update 2014-09, Update 2015-14 and Update 2016-08 and assessing the impact, if any, they may have on its consolidated results of operations, financial position or cash flows.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330) (“Update 2015-11”), which seeks to simplify the measurement of inventory. Update 2015-11 requires that an entity should measure inventory at the lower of cost and net realizable value, where net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For public entities, the amendments in Update 2015-11 are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of Update 2015-11 and assessing the impact, if any, it may have on its consolidated results of operations, financial position or cash flows.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“Update 2016-02”), which seeks to increase transparency and comparability among organizations by, among other things, recognizing lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous GAAP and disclosing key information about leasing arrangements. For public entities, Update 2016-02 becomes effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of Update 2016-02 and assessing the impact, if any, it may have on its consolidated results of operations, financial position or cash flows.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718) (“Update 2016-09”), which seeks to simplify accounting for share-based payment transactions including income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. For public entities, Update 2016-09 becomes effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of Update 2016-09 and assessing the impact, if any, it may have on its consolidated results of operations, financial position or cash flows.

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Cash And Cash Equivalents (Tables)

3 Months Ended

Mar. 31, 2016

Cash And Cash Equivalents [Abstract]

Summary Of Cash And Cash Equivalents

	March 31,		December 31,
	2016		2015
		(in millions)
Cash	$	57	$	15
Marketable securities		1,540		–
Total cash and cash equivalents	$	1,597	$	15

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Reduction In Workforce (Tables)

3 Months Ended

Mar. 31, 2016

Reduction In Workforce [Abstract]

Summary Of Restructuring Charges

	For the three months
	ended March 31, 2016
	(in millions)
Severance (including payroll taxes)	$	42
Stock-based compensation		18
Benefits		3
Outplacement services, other		1
Total restructuring charges (1)	$	64

(1) Total restructuring charges were $61 million and $3 million for the Company’s E&P and Midstream segments, respectively.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share

	For the three months ended
	March 31,
	2016		2015
	(in millions, except share/per share amounts)
Net income (loss)	$	(1,132)	$	78
Mandatory convertible preferred stock dividend		27		25
Net income (loss) attributable to shareholders		(1,159)		53
Participating securities - mandatory convertible preferred stock		–		7
Net income (loss) attributable to common stock	$	(1,159)	$	46
Number of common shares:
Weighted average outstanding		382,870,847		375,444,030
Issued upon assumed exercise of outstanding stock options (1)		–		–
Effect of issuance of non-vested restricted common stock (2)		–		133,634
Effect of issuance of non-vested performance units (3)		–		390
Effect of issuance of mandatory convertible preferred stock (4)		–		–
Effect of declaration of preferred stock dividends (5)		–		–
Weighted average and potential dilutive outstanding		382,870,847		375,578,054
Earnings (loss) per common share:
Basic	$	($3.03)	$	0.12
Diluted	$	($3.03)	$	0.12

(1) Due to the net loss for the three months ended March 31, 2016, the unvested stock options were not recognized in diluted earnings per share calculations as they would be antidilutive. Options for 5,732,521 shares and 3,704,089 shares were excluded from the calculation of diluted shares for the three months ended March 31, 2016 and 2015, respectively, because they would have had an antidilutive effect.

(2) Due to the net loss for the three months ended March 31, 2016, the unvested share-based payments were not recognized in diluted earnings per share calculations as they would be antidilutive.  The calculation excluded5,779,820 sharesand1,916,645 shares of restricted stock for the three months ended March 31, 2016 and 2015, respectively, because they would have had an antidilutive effect.

(3) For the three months ended March 31, 2016, 297,297 shares of performance units were excluded from the calculation of diluted earnings per share as they would be antidilutive.

(4) For the three months ended March 31, 2016 and 2015, 74,999,895 and 58,333,252, respectively, of weighted average common shares issuable upon the assumed conversion of the mandatory convertible preferred stock were excluded from the diluted earnings per share calculation as they would be antidilutive.

(5) Due to the net loss for the three months ended March 31, 2016, 3,024,737 shares ofcommon stockdeclared as preferred stock dividends were excluded from the diluted earnings per share calculations as they would have had an antidilutive effect.

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Derivatives And Risk Management (Tables)

3 Months Ended

Mar. 31, 2016

Derivatives And Risk Management [Abstract]

Schedule Of Derivative Instruments, Notional Amount In BCF, Weighted Average Contract Prices And Fair Value

		Weighted Average Price per MMBtu
	Volume (Bcf)	Swaps		Purchased Puts		Sold Calls		Fair value at March 31, 2016 ($ in millions)
Natural Gas:
Fixed Price Swaps:
2016	64	$	2.48	$	–	$	–	$	20
Purchased Put Options:
2016	43	$	–	$	2.35	$	–	$	15
Sold Call Options:
2016	90	$	–	$	–	$	5.00	$	–
2017	86	$	–	$	–	$	3.25	$	(16)
2018	63	$	–	$	–	$	3.50	$	(12)
2019	52	$	–	$	–	$	3.50	$	(13)
2020	32	$	–	$	–	$	3.75	$	(9)

Balance Sheet Classification Of Derivative Financial Instruments

	Derivative Assets
	Balance Sheet Classification		Fair Value
			March 31, 2016		December 31, 2015
		(in millions)
Basis swaps	Derivative assets		$	–	$	3
Fixed price swaps	Derivative assets			20		–
Purchased put options	Derivative assets			15		–
Total derivative assets			$	35	$	3
	Derivative Liabilities
	Balance Sheet Classification		Fair Value
			March 31, 2016		December 31, 2015
			(in millions)
Sold call options	Derivative liabilities		$	5	$	–
Interest rate swaps	Derivative liabilities			3		3
Sold call options	Other long-term liabilities			45		–
Interest rate swaps	Other long-term liabilities			5		2
Total derivative liabilities			$	58	$	5

Summary Of Before Tax Effect Of Fair Value Hedges Not Designated For Hedge Accounting

		Gain (Loss) on Derivatives,
		Unsettled
		Recognized in Earnings
	Consolidated Statement of Operations	For the three months ended
	Classification of Gain (Loss) on	March 31,
Derivative Instrument	Derivatives, Unsettled	2016		2015
		(in millions)
Basis swaps	Gain (Loss) on Derivatives	$	(3)	$	(8)
Sold call options	Gain (Loss) on Derivatives		(50)		8
Purchased put options	Gain (Loss) on Derivatives		15		–
Fixed price swaps	Gain (Loss) on Derivatives		20		(18)
Interest rate swaps	Gain (Loss) on Derivatives		(3)		(3)
Total loss on unsettled derivatives		$	(21)	$	(21)
		Gain (Loss)
		on Derivatives, Settled (1)
		Recognized in Earnings
	Consolidated Statement of Operations	For the three months ended
	Classification of Gain (Loss)	March 31,
Derivative Instrument	on Derivatives, Settled (1)	2016		2015
		(in millions)
Basis swaps	Gain (Loss) on Derivatives	$	4	$	(6)
Fixed price swaps	Gain (Loss) on Derivatives		4		42
Interest rate swaps	Gain (Loss) on Derivatives		(1)		(1)
Total gain on settled derivatives (2)		$	7	$	35
Total gain (loss) on derivatives		$	(14)	$	14

(1) The Company calculates gain (loss) on derivatives, settled, as the summation of gains and losses on positions that have settled within the period.

(2) These amounts are included, along with gas sales revenues, in the calculation of the Company’s realized natural gas price.

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Reclassifications From Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2016

Reclassifications From Accumulated Other Comprehensive Income [Abstract]

Components Of Accumulated Other Comprehensive Income (Loss)

	For the three months ended
	March 31, 2016
	Pension and Other Postretirement		Foreign Currency		Total
	(in millions) (1)
Beginning balance at December 31, 2015	$	(25)	$	(23)	$	(48)
Other comprehensive income before reclassifications		–		3		3
Amounts reclassified from other comprehensive income (loss) (2)		1		–		1
Net current-period other comprehensive loss		1		3		4
Ending balance at March 31, 2016	$	(24)	$	(20)	$	(44)

(1) All amounts are net of tax.

(2) See separate table below for details about these reclassifications.

Amounts Reclassified From Accumulated Other Comprehensive Income (Loss)

Details about Accumulated Other Comprehensive Income	Affected Line Item in the Consolidated Statement of Operations		Amount Reclassified from Accumulated Other Comprehensive Income
			For the three months ended March 31, 2016
			(in millions)
Pension and other postretirement
Amortization of prior service cost and net loss (1)	General and administrative expenses	$	2
	Provision for income taxes		1
Total reclassifications for the period	Net loss	$	1

(1) See Note 12 for additional details regarding the Company’s retirement and employee benefit plans.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Measurements [Abstract]

Carrying Amount And Estimated Fair Values Of Financial Instruments

	March 31, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(in millions)
Cash and cash equivalents	$	1,597	$	1,597	$	15	$	15
Credit facility		1,852		1,852		116		116
Term loan facility		748		748		747		747
Senior notes		3,843		2,729		3,842		2,651
Derivative instruments, net		(23)		(23)		(2)		(2)

Summary Of Assets And Liabilities Measured At Fair Value On Recurring Basis

	March 31, 2016
	Fair Value Measurements Using:
	Quoted Prices		Significant		Significant
	in Active		Other		Unobservable
	Markets		Observable Inputs		Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Fixed price swap assets	$	–	$	20	$	–	$	20
Purchased put option assets		–		–		15		15
Interest rate swap liabilities		–		(8)		–		(8)
Sold call option liabilities		–		–		(50)		(50)
Total	$	–	$	12	$	(35)	$	(23)
	December 31, 2015
	Fair Value Measurements Using:
	Quoted Prices		Significant		Significant
	in Active		Other		Unobservable
	Markets		Observable Inputs		Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Basis swap assets	$	–	$	–	$	3	$	3
Interest rate swap liabilities		–		(5)		–		(5)
Total	$	–	$	(5)	$	3	$	(2)

Reconciliations For Change In Net Fair Value Of Derivative Assets And Liabilities Measured At Fair Value On A Recurring Basis Using Significant Unobservable Inputs (Level 3)

	For the three months ended
	March 31,
	2016		2015
	(in millions)
Balance at beginning of period	$	3	$	(8)
Total gains (losses):
Included in earnings		(34)		(6)
Purchases, issuances, and settlements:
Settlements		(4)		6
Transfers into/out of Level 3		–		–
Balance at end of period	$	(35)	$	(8)
Change in losses included in earnings relating to derivatives still held as of March 31	$	(38)	$	–

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Debt (Tables)

3 Months Ended

Mar. 31, 2016

Debt [Abstract]

Components Of Debt

		March 31, 2016
		(in millions)
	Debt Instrument		Unamortized Issuance Cost		Unamortized Debt Discount		Total
Short-term debt:
7.15% Senior Notes due May 2018	$	1	$	–	$	–	$	1
Total short-term debt	$	1	$	–	$	–	$	1
Long-term debt:
Variable rate (4.154% at March 31, 2016) credit facility, expires December 2018		1,852		–		–		1,852
Variable rate (2.025% at March 31, 2016) term loan facility, due November 2018		750		(2)		–		748
7.35% Senior Notes due October 2017		15		–		–		15
7.125% Senior Notes due October 2017		25		–		–		25
3.3% Senior Notes due January 2018		350		(2)		–		348
7.5% Senior Notes due February 2018		600		(2)		–		598
7.15% Senior Notes due May 2018		26		–		–		26
4.05% Senior Notes due January 2020		850		(5)		–		845
4.10% Senior Notes due March 2022		1,000		(5)		(1)		994
4.95% Senior Notes due January 2025		1,000		(7)		(2)		991
Total long-term debt	$	6,468	$	(23)	$	(3)	$	6,442
Total debt	$	6,469	$	(23)	$	(3)	$	6,443

		December 31, 2015
		(in millions)
	Debt Instrument		Unamortized Issuance Cost		Unamortized Debt Discount		Total
Short-term debt:
7.15% Senior Notes due May 2018	$	1	$	–	$	–	$	1
Total short-term debt	$	1	$	–	$	–	$	1
Long-term debt:
Variable rate (1.886% at December 31, 2015) credit facility, expires December 2018		116		–		–		116
Variable rate (1.775% at December 31, 2015) term loan facility, due November 2018		750		(3)		–		747
7.35% Senior Notes due October 2017		15		–		–		15
7.125% Senior Notes due October 2017		25		–		–		25
3.3% Senior Notes due January 2018		350		(2)		–		348
7.5% Senior Notes due February 2018		600		(2)		–		598
7.15% Senior Notes due May 2018		26		–		–		26
4.05% Senior Notes due January 2020		850		(5)		(1)		844
4.10% Senior Notes due March 2022		1,000		(5)		(1)		994
4.95% Senior Notes due January 2025		1,000		(7)		(2)		991
Total long-term debt	$	4,732	$	(24)	$	(4)	$	4,704
Total debt	$	4,733	$	(24)	$	(4)	$	4,705

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Pension Plan And Other Postretirement Benefits (Tables)

3 Months Ended

Mar. 31, 2016

Pension Plan And Other Postretirement Benefits [Abstract]

Pension And Other Postretirement Benefit Costs

	Pension Benefits
	For the three months ended
	March 31,
	2016		2015
	(in millions)
Service cost	$	4	$	4
Interest cost		2		1
Expected return on plan assets		(2)		(2)
Amortization of prior service cost		–		–
Amortization of net loss		–		1
Net periodic benefit cost	$	4	$	4

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

Stock-Based Compensation [Abstract]

Schedule Of Stock-Based Compensation Costs

	For the three months ended
	March 31,
	2016		2015
	(in millions)
Stock-based compensation cost – expensed (1)	$	23	$	6
Stock-based compensation cost – capitalized	$	3	$	5

(1) Includes $18 million related to the reduction in workforce that occurred in the first quarter of 2016.

Summary Of Stock Option Activity

	Number		Weighted Average
	of Options		Exercise Price
	(in thousands)		(per share)
Outstanding at December 31, 2015		5,623	$	24.57
Granted		156		8.60
Exercised		–		–
Forfeited or expired		(10)		30.29
Outstanding at March 31, 2016		5,769		24.13
Exercisable at March 31, 2016		2,567	$	36.12

Summary Of Restricted Stock Activity

	Number		Weighted Average
	of Shares		Fair Value
	(in thousands)		(per share)
Unvested shares at December 31, 2015		7,222	$	13.24
Granted		77		8.35
Vested (1)		(1,947)		8.32
Forfeited		(24)		12.11
Unvested shares at March 31, 2016		5,328	$	13.24

(1) Includes 1,887,160 shares related to the reduction in workforce that occurred in the first quarter of 2016.

Summary Of Performance Unit Activity

	Number		Weighted Average
	of Units (1)		Fair Value
	(in thousands)		(per share)
Unvested units at December 31, 2015		407	$	36.65
Granted (2)		1,061		8.31
Vested (3)		(5)		8.08
Forfeited		(38)		8.08
Unvested units at March 31, 2016		1,425	$	14.47

(1) These amounts reflect the number of performance units granted in thousands. The actual payout of shares may range from a minimum of zero shares to a maximum of two shares contingent upon the actual performance against the Performance Measures.

(2) Excludes 441,450 units in excess of individual award limits subject to shareholder approval of the amended 2013 Incentive Plan at the annual meeting on May 17, 2016.

(3) Includes 5,168units related to the reduction in workforce that occurred in the first quarter of 2016.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Information [Abstract]

Summary Financial Information For Company's Reportable Segments

	Exploration and			Midstream
	Production			Services			Other			Total
	(in millions)
Three months ended March 31, 2016:
Revenues from external customers	$	343		$	236		$	–		$	579
Intersegment revenues		(7)			385			–			378
Depreciation, depletion and amortization expense		127			16			–			143
Impairment of natural gas and oil properties		1,034			–			–			1,034
Operating income (loss)		(1,160)	(1)		60	(2)		–			(1,100)
Interest expense (3)		14			–			–			14
Other loss, net		(2)			(1)			–			(3)
Loss on derivatives		(13)			(1)			–			(14)
Provision for income taxes (3)		1			–			–			1
Assets		5,538			1,220			1,760	(4)		8,518
Capital investments (5)		120			2			–			122
Three months ended March 31, 2015:
Revenues from external customers	$	660		$	273		$	–		$	933
Intersegment revenues		(5)			665			1			661
Depreciation, depletion and amortization expense		278			15			–			293
Operating income (loss)		78			88			(1)			165
Interest expense (3)		45			7			(1)			51
Other loss, net		(1)			–			–			(1)
Gain (loss) on derivatives		15			–			(1)			14
Provision for income taxes (3)		18			31			–			49
Assets		13,703			1,616			242	(4)		15,561
Capital investments (5)		1,030			138			3			1,171

(1) Operating income (loss) for the E&P segment includes $61 million related to restructuring charges.

(2) Operating income (loss) for the Midstream segment includes $3 million related to restructuring charges.

(3) Interest expense and the provision forincome taxes by segment are an allocation of corporate amounts as they are incurred at the corporate level.

(4) Other assets represent corporate assets not allocated to segments and assets for non-reportable segments.  At March 31, 2016, other assets includes $1.55 billion in marketable securities, which were sold on April 1, 2016 to repay revolver debt.  See Note 2 to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional discussion.

(5) Capital investments includes a  $78 million decrease and an immaterial increase for the three months ended March 31, 2016 and 2015, respectively, relating to the change in accrued expenditures between periods.  E&P capital for the three month period ended March 31, 2015 includes approximately $534 million related to the WPX Property and Statoil Property Acquisitions. Midstream capital for the three months ended March 31, 2015 includes approximately $119 million associated with the intangible asset related to the firm transportation acquired through the WPX Property Acquisition.

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Cash And Cash Equivalents (Narrative) (Details) - Unsecured Debt [Member] - Credit Facility [Member] - USD ($) $ in Millions	Apr. 01, 2016	Mar. 30, 2016
Line of Credit Facility [Line Items]
Line of credit, amount borrowed		$ 1,550
Subsequent Event [Member]
Line of Credit Facility [Line Items]
Repayment of line of credit	$ 1,550

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Cash And Cash Equivalents (Summary Of Cash And Cash Equivalents) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Cash And Cash Equivalents [Abstract]
Cash	$ 57	$ 15
Marketable securities	1,540
Total cash and cash equivalents	$ 1,597	$ 15	$ 17	$ 53

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Reduction In Workforce (Narrative) (Details) - Workforce Reduction [Member] $ in Millions	1 Months Ended
	Jan. 31, 2016 employee	Mar. 31, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Positions eliminated, percent	40.00%
Positions eliminated | employee	1,100
Restructuring reserve | $		$ 24

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Reduction In Workforce (Summary Of Restructuring Charges) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring Cost and Reserve [Line Items]
Severance (including payroll taxes)	$ 42
Stock-based compensation	23	$ 6
Total restructuring charges	64
Exploration and Production [Member]
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	61
Midstream Services [Member]
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	3
Workforce Reduction [Member]
Restructuring Cost and Reserve [Line Items]
Severance (including payroll taxes)	42
Stock-based compensation	18
Benefits	3
Outplacement services, other	1
Total restructuring charges	$ 64

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Acquisitions And Divestitures (Narrative) (Details) $ in Millions	1 Months Ended					3 Months Ended	12 Months Ended
	Nov. 30, 2015 USD ($)	May. 31, 2015 USD ($)	Apr. 30, 2015 USD ($) mi MMcf	Jan. 31, 2015 USD ($) a MMcf	Dec. 31, 2014 USD ($) a MMcf	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($) a item MMcf
Business Acquisition [Line Items]
Area of land purchased | a					413,000			413,000
Bridge Loan [Member]
Business Acquisition [Line Items]
Bridge loan				$ 4,500	$ 4,500		$ 4,500	$ 4,500
Debt instrument, term				364 days			364 days	364 days
Debt issuance costs				$ 47
Unsecured Debt [Member] | Term Loan due November 2018 [Member]
Business Acquisition [Line Items]
Loans payable	$ 750				$ 500			$ 500
Maturity date, month and year								2016-12
Debt instrument, term	3 years							2 years
WPX Property Acquisition [Member]
Business Acquisition [Line Items]
Area of land purchased | a				46,700
Cash consideration				$ 270
Net production per day of acreage sold in MMcf | MMcf					50			50
Number of horizontal wells operated | item								63
Firm transportation capacity assumed, per day | MMcf				260
Firm transportation, useful life				19 years
Amortization						$ 10	$ 8
Statoil Property Acquisition [Member]
Business Acquisition [Line Items]
Area of land purchased | a				30,000
Percentage of interest acquired				20.00%
Cost to acquire property				$ 357
Allocated to natural gas and oil properties				$ 357
Chesapeake Property Acquisition [Member]
Business Acquisition [Line Items]
Cash consideration					$ 5,000
East Texas and Arkoma Basin [Member]
Business Acquisition [Line Items]
Proceeds from sale of oil and gas property and equipment		$ 211
Reduction in capitalized costs relating to proceeds		$ (205)
Bradford And Lycoming Counties, Pennsylvania [Member]
Business Acquisition [Line Items]
Proceeds from sale of oil and gas property and equipment			$ 489
Net book value			206
Gain on sale of property			$ 283
Number of miles of natural gas gathering pipeline | mi			100
Pipeline capacity per day | MMcf			600

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Natural Gas And Oil Properties (Narrative) (Details) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2016 USD ($) $ / MMBTU $ / bbl	Mar. 31, 2015 USD ($) $ / MMBTU $ / bbl	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)
Natural Gas and Oil Properties [Line Items]
Natural gas, oil and NGL reserves discount	10.00%
Period of time needed to calculate ceiling value of reserves			12 months
Cash flow hedges impact on ceiling value, net of tax | $		$ 45
Impairment of natural gas and oil properties, net of tax | $	$ 641		$ 1,586	$ 1,746	$ 944
Natural Gas [Member] | Henry Hub [Member]
Natural Gas and Oil Properties [Line Items]
Full cost ceiling test, price | $ / MMBTU	2.40	3.88
Oil [Member] | West Texas Intermediate [Member]
Natural Gas and Oil Properties [Line Items]
Full cost ceiling test, price | $ / bbl	42.77	79.21
NGL [Member]
Natural Gas and Oil Properties [Line Items]
Full cost ceiling test, price | $ / bbl	5.76	16.38

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Earnings Per Share (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended	12 Months Ended
	Apr. 15, 2016	Jan. 31, 2015	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Bridge Loan [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Bridge loan		$ 4,500		$ 4,500	$ 4,500
Debt instrument, term		364 days		364 days	364 days
Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares issued		30,000,000
Share price		$ 23.00
Proceeds from issuance of shares		$ 669
Depositary Shares [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares issued		34,500,000
Proceeds from issuance of shares		$ 1,700
Depositary shares conversion rate		5.00%
Liquidation preference per share		$ 50
Series B Preferred Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Liquidation preference per share		$ 1,000	$ 1,000	$ 1,000
Trading day period			20 days
Senior Notes [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Proceeds from issuance of debt		$ 2,200
Minimum [Member] | Depositary Shares [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares issued upon conversion			1.85014
Minimum [Member] | Series B Preferred Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares issued upon conversion			37.0028
Maximum [Member] | Depositary Shares [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares issued upon conversion			2.17391
Maximum [Member] | Series B Preferred Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares issued upon conversion			43.4782
Subsequent Event [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common stock, shares issued as stock dividend	3,024,737

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Earnings Per Share (Schedule Of Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Mar. 16, 2016	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Line Items]
Net income (loss)		$ (1,132)	$ 78
Mandatory convertible preferred stock dividend		27	25
Net income (loss) attributable to shareholders		$ (1,159)	53
Participating securities - mandatory convertible preferred stock			7
Net Income (Loss) Attributable to Common Stock		$ (1,159)	$ 46
Number of common shares, Weighted average outstanding		382,870,847	375,444,030
Number of common shares: Issued upon assumed exercise of outstanding stock options
Number of common shares: Effect of issuance of non-vested restricted common stock			133,634
Number of common shares: Effect of issuance of non-vested performance units			390
Number of common shares: Effect of issuance of mandatory convertible preferred stock
Number of common shares: Effect of declaration of preferred stock dividends
Number of common shares, Weighted average and potential dilutive outstanding		382,870,847	375,578,054
Basic		$ (3.03)	$ 0.12
Diluted		$ (3.03)	$ 0.12
Common stock, shares declared as stock dividend	3,024,737	3,024,737
Stock Options [Member]
Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, shares		5,732,521	3,704,089
Restricted Stock [Member]
Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, shares		5,779,820	1,916,645
Performance Units [Member]
Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, shares		297,297
Mandatory Convertible Preferred Stock [Member]
Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, shares		74,999,895	58,333,252

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Derivatives And Risk Management (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Derivative [Line Items]
Gas sales	$ 315	$ 625
Interest Rate Swaps [Member]
Derivative [Line Items]
Derivative liabilities	8		$ 5
Fixed Price Swaps [Member]
Derivative [Line Items]
Accumulated other comprehensive income		24
Gas sales		$ 42
Not Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member]
Derivative [Line Items]
Notional amount	$ 170
Derivative, expiration	Jun. 30, 2020
Natural Gas [Member]
Derivative [Line Items]
Derivative liabilities	$ 15

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Derivatives And Risk Management (Schedule Of Derivative Instruments, Notional Amount In BCF, Weighted Average Contract Prices And Fair Value) (Details) - Not Designated as Hedging Instrument [Member] $ in Millions, ft³ in Billions	3 Months Ended
	Mar. 31, 2016 USD ($) $ / MMBTU ft³
2016 [Member] | Fixed Price Swaps [Member]
Derivative [Line Items]
Volume (Bcf) | ft³	64
Average fixed price per MMBtu | $ / MMBTU	2.48
Fair value | $	$ 20
2016 [Member] | Purchased Put Options [Member]
Derivative [Line Items]
Volume (Bcf) | ft³	43
Floor price per MMBtu | $ / MMBTU	2.35
Fair value | $	$ 15
2016 [Member] | Sold Call Options [Member]
Derivative [Line Items]
Volume (Bcf) | ft³	90
Cap price per MMBtu | $ / MMBTU	5.00
Fair value | $
2017 [Member] | Sold Call Options [Member]
Derivative [Line Items]
Volume (Bcf) | ft³	86
Cap price per MMBtu | $ / MMBTU	3.25
Fair value | $	$ (16)
2018 [Member] | Sold Call Options [Member]
Derivative [Line Items]
Volume (Bcf) | ft³	63
Cap price per MMBtu | $ / MMBTU	3.50
Fair value | $	$ (12)
2019 [Member] | Sold Call Options [Member]
Derivative [Line Items]
Volume (Bcf) | ft³	52
Cap price per MMBtu | $ / MMBTU	3.50
Fair value | $	$ (13)
2020 [Member] | Sold Call Options [Member]
Derivative [Line Items]
Volume (Bcf) | ft³	32
Cap price per MMBtu | $ / MMBTU	3.75
Fair value | $	$ (9)

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Derivatives And Risk Management (Balance Sheet Classification Of Derivative Financial Instruments) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative assets	$ 35	$ 3
Derivative liabilities	58	5
Basis Swaps [Member] | Derivative Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets		3
Fixed Price Swaps [Member] | Derivative Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets	20
Purchased Put Options [Member] | Derivative Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets	15
Sold Call Options [Member] | Derivative Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	5
Sold Call Options [Member] | Other Long-Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	45
Interest Rate Swaps [Member] | Derivative Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	3	3
Interest Rate Swaps [Member] | Other Long-Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ 5	$ 2

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Derivatives And Risk Management (Summary Of Before Tax Effect Of Fair Value Hedges Not Designated For Hedge Accounting) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instrument, Gain (Loss) on Derivatives, Unsettled	$ (21)	$ (21)
Derivative Instrument, Gain (Loss) on Derivatives, Settled	7	35
Total gain (loss) on derivatives	(14)	14
Basis Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instrument, Gain (Loss) on Derivatives, Unsettled	(3)	(8)
Derivative Instrument, Gain (Loss) on Derivatives, Settled	4	(6)
Sold Call Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instrument, Gain (Loss) on Derivatives, Unsettled	(50)	8
Purchased Put Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instrument, Gain (Loss) on Derivatives, Unsettled	15
Fixed Price Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instrument, Gain (Loss) on Derivatives, Unsettled	20	(18)
Derivative Instrument, Gain (Loss) on Derivatives, Settled	4	42
Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instrument, Gain (Loss) on Derivatives, Unsettled	(3)	(3)
Derivative Instrument, Gain (Loss) on Derivatives, Settled	$ (1)	$ (1)

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Reclassifications From Accumulated Other Comprehensive Income (Components Of Accumulated Other Comprehensive Income (Loss)) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, December 31, 2015	$ (48)
Other comprehensive income (loss) before reclassifications	3
Amounts reclassified from/to other comprehensive income	1
Net current-period other comprehensive loss	4
Ending balance, March 31, 2016	(44)
Pension And Other Postretirement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, December 31, 2015	$ (25)
Other comprehensive income (loss) before reclassifications
Amounts reclassified from/to other comprehensive income	$ 1
Net current-period other comprehensive loss	1
Ending balance, March 31, 2016	(24)
Foreign Currency [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, December 31, 2015	(23)
Other comprehensive income (loss) before reclassifications	$ 3
Amounts reclassified from/to other comprehensive income
Net current-period other comprehensive loss	$ 3
Ending balance, March 31, 2016	$ (20)

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Reclassifications From Accumulated Other Comprehensive Income (Amounts Reclassified From Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
General and administrative expenses	$ 54	$ 68
Provision for income taxes	1	49
Net Income (Loss)	(1,132)	$ 78
Pension And Other Postretirement [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
General and administrative expenses	2
Provision for income taxes	1
Net Income (Loss)	$ 1

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Fair Value Measurements (Carrying Amount And Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, net	$ (23)	$ (2)
Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	1,597	15
Credit facility	1,852	116
Derivative instruments, net	(23)	(2)
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	1,597	15
Credit facility	1,852	116
Derivative instruments, net	(23)	(2)
Unsecured Debt [Member] | Carrying Amount [Member] | Term Loan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	748	747
Unsecured Debt [Member] | Fair Value [Member] | Term Loan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	748	747
Senior Notes [Member] | Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior notes	3,843	3,842
Senior Notes [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior notes	$ 2,729	$ 2,651

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Fair Value Measurements (Summary Of Assets And Liabilities Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ (23)	$ (2)
Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 12	$ (5)
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	(35)	3
Fixed Price Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 20
Fixed Price Swaps [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets
Fixed Price Swaps [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 20
Purchased Put Options [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 15
Purchased Put Options [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets
Purchased Put Options [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 15
Basis Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets		$ 3
Basis Swaps [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets
Basis Swaps [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets		$ 3
Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ (8)	$ (5)
Interest Rate Swaps [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities
Interest Rate Swaps [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ (8)	$ (5)
Sold Call Options [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ (50)
Sold Call Options [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities
Sold Call Options [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ (50)

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Fair Value Measurements (Reconciliations For Change In Net Fair Value Of Derivative Assets And Liabilities Measured At Fair Value On A Recurring Basis Using Significant Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Fair Value Measurements [Abstract]
Balance at beginning of period	$ 3	$ (8)
Included in earnings	(34)	(6)
Purchases, issuances, and settlements:
Settlements	$ (4)	$ 6
Transfers into/out of Level 3
Balance at end of period	$ (35)	$ (8)
Change in losses included in earnings relating to derivatives still held as of March 31	$ (38)

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Debt (Narrative) (Details)			1 Months Ended			3 Months Ended	12 Months Ended
	Apr. 01, 2016 USD ($)	Mar. 30, 2016 USD ($)	Feb. 29, 2016	Nov. 30, 2015 USD ($)	Jan. 31, 2015 USD ($)	Mar. 31, 2016 USD ($) item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Debt Instrument [Line Items]
Adjusted debt capital structure, percentage						45.00%
Adjusted equity capital structure, percentage						55.00%
Scenario, Forecast [Member]
Debt Instrument [Line Items]
Increase in interest expense							$ 14,000,000
Unsecured Debt [Member] | Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 2,000,000,000
Credit facility, maturity date						Dec. 01, 2018
Number of extension options | item						2
Extension term						1 year
Unsecured revolving credit facility, increase in current borrowing capacity potential						$ 500,000,000
Line of credit, amount borrowed		$ 1,550,000,000
Line of credit, amounts drawn						$ 1,900,000,000
Debt percentage of adjusted book capital structure covenant						60.00%
Unsecured Debt [Member] | Credit Facility [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Repayment of line of credit	$ 1,550,000,000
Unsecured Debt [Member] | Credit Facility [Member] | Over LIBOR [Member]
Debt Instrument [Line Items]
Basis points						2.00%
Unsecured Debt [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Line of credit, amounts drawn						$ 148,000,000
Unsecured Debt [Member] | Commercial Paper [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity						2,000,000,000
Line of credit, amounts drawn						$ 0
Unsecured Debt [Member] | Commercial Paper [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt instrument, term						397 days
Senior Notes [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt					$ 2,200,000,000
Senior Notes [Member] | Over LIBOR [Member]
Debt Instrument [Line Items]
Incremental increase on basis points						0.25%
Increase in basis spread			1.25%
Bridge Loan [Member]
Debt Instrument [Line Items]
Debt instrument, term					364 days			364 days	364 days
Bridge loan					$ 4,500,000,000			$ 4,500,000,000	$ 4,500,000,000
Debt issuance costs					47,000,000
Term Loan due November 2018 [Member] | Unsecured Debt [Member]
Debt Instrument [Line Items]
Loans payable				$ 750,000,000					$ 500,000,000
Debt instrument, term				3 years					2 years
Maturity date, month and year									2016-12
Term Loan due November 2018 [Member] | Unsecured Debt [Member] | Over LIBOR [Member]
Debt Instrument [Line Items]
Basis points				1.625%
3.3% Senior Notes due January 2018 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes					$ 350,000,000
Stated interest rate					3.30%
Maturity date, year					2018
Percentage of face amount, sold to public					99.949%
4.05% Senior Notes due January 2020 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes					$ 850,000,000
Stated interest rate					4.05%
Maturity date, year					2020
Percentage of face amount, sold to public					99.897%
4.95% Senior Notes due January 2025 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes					$ 1,000,000,000
Stated interest rate					4.95%
Maturity date, year					2025
Percentage of face amount, sold to public					99.782%
Commercial Paper And Revolving Credit Facility [Member] | Unsecured Debt [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 2,000,000,000
Common Stock [Member]
Debt Instrument [Line Items]
Proceeds from issuance of shares					$ 669,000,000
Depositary Shares [Member]
Debt Instrument [Line Items]
Proceeds from issuance of shares					$ 1,700,000,000

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Debt (Components Of Debt) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Debt Instrument	$ 6,469	$ 4,733
Unamortized Issuance Costs	(23)	(24)
Unamortized Debt Discount	(3)	(4)
Total	6,443	4,705
Short-term Debt [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 1	$ 1
Unamortized Issuance Costs
Unamortized Debt Discount
Total	$ 1	$ 1
Short-term Debt [Member] | 7.15% Senior Notes due May 2018 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 1	$ 1
Unamortized Issuance Costs
Unamortized Debt Discount
Total	$ 1	$ 1
Stated interest rate	7.15%	7.15%
Maturity date, month and year	2018-05	2018-05
Long-term Debt [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 6,468	$ 4,732
Unamortized Issuance Costs	(23)	(24)
Unamortized Debt Discount	(3)	(4)
Total	6,442	4,704
Long-term Debt [Member] | Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 1,852	$ 116
Unamortized Issuance Costs
Unamortized Debt Discount
Total	$ 1,852	$ 116
Credit facility, variable interest rate	4.154%	1.886%
Credit facility, maturity date	Dec. 01, 2018	Dec. 01, 2018
Long-term Debt [Member] | Term Loan due November 2018 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 750	$ 750
Unamortized Issuance Costs	$ (2)	$ (3)
Unamortized Debt Discount
Total	$ 748	$ 747
Variable interest rate	2.025%	1.775%
Maturity date, month and year	2018-11	2018-11
Long-term Debt [Member] | 7.35% Senior Notes due October 2017 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 15	$ 15
Unamortized Issuance Costs
Unamortized Debt Discount
Total	$ 15	$ 15
Stated interest rate	7.35%	7.35%
Maturity date, month and year	2017-10	2017-10
Long-term Debt [Member] | 7.125% Senior Notes due October 2017 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 25	$ 25
Unamortized Issuance Costs
Unamortized Debt Discount
Total	$ 25	$ 25
Stated interest rate	7.125%	7.125%
Maturity date, month and year	2017-10	2017-10
Long-term Debt [Member] | 3.3% Senior Notes due January 2018 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 350	$ 350
Unamortized Issuance Costs	$ (2)	$ (2)
Unamortized Debt Discount
Total	$ 348	$ 348
Stated interest rate	3.30%	3.30%
Maturity date, month and year	2018-01	2018-01
Long-term Debt [Member] | 7.5% Senior Notes due February 2018 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 600	$ 600
Unamortized Issuance Costs	$ (2)	$ (2)
Unamortized Debt Discount
Total	$ 598	$ 598
Stated interest rate	7.50%	7.50%
Maturity date, month and year	2018-02	2018-02
Long-term Debt [Member] | 7.15% Senior Notes due May 2018 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 26	$ 26
Unamortized Issuance Costs
Unamortized Debt Discount
Total	$ 26	$ 26
Stated interest rate	7.15%	7.15%
Maturity date, month and year	2018-05	2018-05
Long-term Debt [Member] | 4.05% Senior Notes due January 2020 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 850	$ 850
Unamortized Issuance Costs	$ (5)	(5)
Unamortized Debt Discount		(1)
Total	$ 845	$ 844
Stated interest rate	4.05%	4.05%
Maturity date, month and year	2020-01	2020-01
Long-term Debt [Member] | 4.10% Senior Notes due March 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 1,000	$ 1,000
Unamortized Issuance Costs	(5)	(5)
Unamortized Debt Discount	(1)	(1)
Total	$ 994	$ 994
Stated interest rate	4.10%	4.10%
Maturity date, month and year	2022-03	2022-03
Long-term Debt [Member] | 4.95% Senior Notes due January 2025 [Member]
Debt Instrument [Line Items]
Debt Instrument	$ 1,000	$ 1,000
Unamortized Issuance Costs	(7)	(7)
Unamortized Debt Discount	(2)	(2)
Total	$ 991	$ 991
Stated interest rate	4.95%	4.95%
Maturity date, month and year	2025-01	2025-01

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Commitments And Contingencies (Narrative) (Details)	1 Months Ended			3 Months Ended
	Sep. 30, 2015 plaintiff item	Jul. 31, 2013 USD ($)	Aug. 31, 2011 USD ($)	Mar. 31, 2016 USD ($) item	Dec. 31, 2010 USD ($)
Commitments And Contingencies [Line Items]
Obligation under transportation agreements				$ 8,600,000,000
Guarantee obligations relative to the firms transportation agreements and gathering project and services				861,000,000
Litigation settlement, gross			$ 11,000,000
Litigation, portion of profits considered for disgorgement					$ 382,000,000
Disgorgement damages awarded in favor of the plaintiff and intervenor			24,000,000
Litigation, interest and attorney's fees claimed by plaintiffs			$ 9,000,000		$ 11,000,000
Disgorgement recoverable by plaintiff to be reversed		$ 24,000,000
Actual damages recoverable by plaintiff to be reversed		$ 11,000,000
Indemnification liability				0
Access Capacity on Future Projects Concentration Risk [Member]
Commitments And Contingencies [Line Items]
Obligation under transportation agreements				$ 3,300,000,000
Arkansas Royalty Litigation [Member]
Commitments And Contingencies [Line Items]
Number of cases | item				3
Arkansas Royalty Litigation [Member] | Arkansas State Court 2010 and 2013 [Member]
Commitments And Contingencies [Line Items]
Number of cases | item				2
Arkansas Royalty Litigation [Member] | Federal Court 2014 [Member]
Commitments And Contingencies [Line Items]
Number of cases | item				1
Loss contingency, range of possible loss, minimum				$ 100,000,000
Arkansas Royalty Litigation [Member] | Arkansas State Court 2015 [Member]
Commitments And Contingencies [Line Items]
Number of cases | item	3
Number of plaintiffs | plaintiff	248

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Pension Plan And Other Postretirement Benefits (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost	$ 4	$ 4
Employer contributions	3
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost	$ 1	$ 1
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Common stock purchased under the terms of the Non-Qualified Plan presented as treasury stock	31,269		47,149

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Pension Plan And Other Postretirement Benefits (Pension And Other Postretirement Benefit Costs) (Details) - Pension Benefits [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 4	$ 4
Interest cost	2	1
Expected return on plan assets	$ (2)	$ (2)
Amortization of prior service cost
Amortization of net loss		$ 1
Net periodic benefit cost	$ 4	$ 4

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Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Jan. 31, 2016	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to the Company's unvested stock option grants, restricted stock grants, and performance units		$ 86
Weighted average period over which cost is recognized, years		3 years
Stock-based compensation		$ 23	$ 6
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, exercised, number of options
Performance Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock awards from grant date		3 years
Workforce Reduction [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Positions eliminated, percent	40.00%
Stock-based compensation		$ 18

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Stock-Based Compensation (Schedule Of Stock-Based Compensation Costs - Stock Options) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation costs - expensed	$ 23	$ 6
Stock-based compensation costs - capitalized	3	$ 5
Workforce Reduction [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation costs - expensed	$ 18

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Stock-Based Compensation (Summary Of Stock Option Activity) (Details) - Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, Outstanding at December 31, Number of Options | shares	5,623
Stock options, Granted, Number of Options | shares	156
Stock options, Exercised, Number of Options | shares
Stock options, Forfeited or expired, Number of Options | shares	(10)
Stock options, Outstanding at March 31, Number of Options | shares	5,769
Stock options, Exercisable at March 31, Number of Options | $	$ 2,567
Stock options, Outstanding at December 31, Weighted Average Exercise Price	$ 24.57
Stock options, Granted, Weighted Average Exercise Price	$ 8.60
Stock options, Exercised, Weighted Average Exercise Price
Stock options, Forfeited or expired, Weighted Average Exercise Price	$ 30.29
Stock options, Outstanding at March 31, Weighted Average Exercise Price	24.13
Stock options, Exercisable at March 31, Weighted Average Exercise Price	$ 36.12

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Stock-Based Compensation (Summary Of Restricted Stock Activity) (Details) - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested shares/units at December 31, Number of Shares	7,222,000
Granted, Number of Shares/Units	77,000
Vested, Number of Shares/Units	(1,947,000)
Forfeited, Number of Shares/Units	(24,000)
Unvested shares/units at March 31, Number of Shares	5,328,000
Unvested shares/units at December 31, Weighted Average Fair Value | $ / shares	$ 13.24
Granted, Weighted Average Fair Value | $ / shares	8.35
Vested, Weighted Average Fair Value | $ / shares	8.32
Forfeited, Weighted Average Fair Value | $ / shares	12.11
Unvested shares at March 31, Weighted Average Fair Value | $ / shares	$ 13.24
Workforce Reduction [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested, Number of Shares/Units	(1,887,160)

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Stock-Based Compensation (Summary Of Performance Unit Activity) (Details) - Performance Units [Member]	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested shares/units at December 31, Number of Shares	407,000
Granted, Number of Shares/Units	1,061,000
Vested, Number of Shares/Units	(5,000)
Forfeited, Number of Shares/Units	(38,000)
Unvested shares/units at March 31, Number of Shares	1,425,000
Unvested shares/units at December 31, Weighted Average Fair Value | $ / shares	$ 36.65
Granted, Weighted Average Fair Value | $ / shares	8.31
Vested, Weighted Average Fair Value | $ / shares	8.08
Forfeited, Weighted Average Fair Value | $ / shares	8.08
Unvested shares at March 31, Weighted Average Fair Value | $ / shares	$ 14.47
Number in excess of individual award limits excluded	441,450
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Number of Shares/Units	0
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Number of Shares/Units	2
Workforce Reduction [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested, Number of Shares/Units	(5,168)

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Segment Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Revenues	$ 579	$ 933
Depreciation, depletion and amortization expense	143	$ 293
Impairment of natural gas and oil properties	1,034
Operating income (loss)	(1,100)	$ 165
Interest expense	14	51
Other loss, net	(3)	(1)
Gain (loss) on derivatives	(14)	14
Provision for income taxes	1	49
Assets	8,518	15,561	$ 8,086
Capital investments	122	1,171
Restructuring charges	64
Marketable securities	1,550
Change in accrued expenditures	(78)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(378)	(661)
Exploration and Production [Member]
Segment Reporting Information [Line Items]
Revenues	343	660
Depreciation, depletion and amortization expense	127	278
Impairment of natural gas and oil properties	1,034
Operating income (loss)	(1,160)	78
Interest expense	14	45
Other loss, net	(2)	(1)
Gain (loss) on derivatives	(13)	15
Provision for income taxes	1	18
Assets	5,538	13,703
Capital investments	120	1,030
Restructuring charges	61
Exploration and Production [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	7	5
Exploration and Production [Member] | Canada [Member]
Segment Reporting Information [Line Items]
Assets	53	71
Capital investments	1	1
Midstream Services [Member]
Segment Reporting Information [Line Items]
Revenues	236	273
Depreciation, depletion and amortization expense	16	15
Operating income (loss)	60	88
Interest expense		7
Other loss, net	(1)
Gain (loss) on derivatives	(1)
Provision for income taxes		31
Assets	1,220	1,616
Capital investments	2	138
Restructuring charges	3
Midstream Services [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(385)	(665)
Other [Member]
Segment Reporting Information [Line Items]
Operating income (loss)		(1)
Interest expense		(1)
Gain (loss) on derivatives		(1)
Assets	1,760	242
Capital investments		3
Other [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues		(1)
Marketing [Member] | Midstream Services [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	$ (319)	(576)
WPX and Statoil Property Acquisitions [Member] | Exploration and Production [Member]
Segment Reporting Information [Line Items]
Capital investments		534
WPX Property Acquisition [Member] | Midstream Services [Member]
Segment Reporting Information [Line Items]
Capital investments		$ 119

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Income Taxes (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Income Taxes [Abstract]
Effective tax rate of provision for income taxes	0.00%
Increase in valuation allowance	$ 431
Projected cumulative loss period evaluated for objective negatve evidence	3 years

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New Accounting Pronouncements (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
New Accounting Pronouncements [Abstract]
Unamortized debt expense	$ 23	$ 24