Derivatives and Risk Management (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments Notional Amount, Weighted Average Contract Prices and Fair Value

The following tables provide 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 tables present the notional amount, the weighted average contract prices and the fair value by expected maturity dates as of March 31, 2022:

Financial Protection on Production
		Weighted Average Price per MMBtu
	Volume (Bcf)	Swaps		Sold Puts		Purchased Puts		Sold Calls		Basis Differential		Fair Value at March 31, 2022 (in millions)
Natural Gas
2022
Fixed price swaps	627	$	3.04	$	—	$	—	$	—	$	—	$	(1,672)
Two-way costless collars	78	—		—		2.53		2.92		—		(216)
Three-way costless collars	277	—		2.03		2.48		2.88		—		(784)
Total	982											$	(2,672)
2023
Fixed price swaps	504	$	3.08	$	—	$	—	$	—	$	—	$	(675)
Two-way costless collars	219	—		—		3.03		3.55		—		(217)
Three-way costless collars	215	—		2.09		2.54		3.00		—		(355)
Total	938											$	(1,247)
2024
Fixed price swaps	224	$	2.96	$	—	$	—	$	—	$	—	$	(174)
Two-way costless collars	44	—		—		3.07		3.53		—		(19)
Three-way costless collars	11	—		2.25		2.80		3.54		—		(12)
Total	279											$	(205)
Basis Swaps
2022	277	$	—	$	—	$	—	$	—	$	(0.53)	$	72
2023	250	—		—		—		—		(0.47)		20
2024	46	—		—		—		—		(0.71)		9
2025	9	—		—		—		—		(0.64)		3
Total	582											$	104

	Volume (MBbls)	Weighted Average Strike Price per Bbl								Fair Value at March 31, 2022 (in millions)
		Swaps		Sold Puts		Purchased Puts		Sold Calls
Oil
2022
Fixed price swaps	2,376	$	53.32	$	—	$	—	$	—	$	(94)
Three-way costless collars	1,037	—		39.83		50.17		57.01		(38)
Total	3,413									$	(132)
2023
Fixed price swaps	846	$	55.98	$	—	$	—	$	—	$	(23)
Three-way costless collars	1,268	—		33.97		45.51		56.12		(36)
Total	2,114									$	(59)
2024
Fixed price swaps	603	$	68.68	$	—	$	—	$	—	$	(5)
Ethane
2022
Fixed price swaps	4,142	$	11.27	$	—	$	—	$	—	$	(26)
2023
Fixed price swaps	1,308	$	11.91	$	—	$	—	$	—	$	(3)
Propane
2022
Fixed price swaps	4,643	$	31.09	$	—	$	—	$	—	$	(118)
Three-way costless collars	230	—		16.80		21.00		31.92		(6)
Total	4,873									$	(124)
2023
Fixed price swaps	1,066	$	37.15	$	—	$	—	$	—	$	(8)
Normal Butane
2022
Fixed price swaps	1,388	$	36.22	$	—	$	—	$	—	$	(43)
2023
Fixed price swaps	329	$	40.64	$	—	$	—	$	—	$	(3)
Natural Gasoline
2022
Fixed price swaps	1,497	$	55.78	$	—	$	—	$	—	$	(57)
2023
Fixed price swaps	359	$	66.00	$	—	$	—	$	—	$	(5)

Other Derivative Contracts
	Volume (Bcf)	Weighted Average Strike Price per MMBtu		Fair Value at March 31, 2022 (in millions)
Call Options – Natural Gas (Net)
2022	63	$	3.01	$	(171)
2023	46	2.94		(74)
2024	9	3.00		(13)
Total	118			$	(258)

	Volume (Bcf)	Weighted Average Strike Price per MMBtu				Fair Value at March 31, 2022 (in millions)
		Swaps		Basis Differential
Storage (1)
2022
Purchased fixed price swaps	—	$	2.14	$	—	$	1

(1)The Company has entered into certain derivatives to protect the value of volumes of natural gas injected into a storage facility that will be withdrawn and sold at a later date.

Balance Sheet Classification of Derivative Financial Instruments

The balance sheet classification of the assets and liabilities related to derivative financial instruments are summarized below as of March 31, 2022 and December 31, 2021:

Derivative Assets
		Fair Value
(in millions)	Balance Sheet Classification	March 31, 2022		December 31, 2021
Derivatives not designated as hedging instruments:
Fixed price swaps – natural gas	Derivative assets	$	—	$	79
Fixed price swaps – ethane	Derivative assets	—		2
Fixed price swaps – propane	Derivative assets	—		2
Fixed price swaps – normal butane	Derivative assets	—		1
Two-way costless collars – natural gas	Derivative assets	10		9
Three-way costless collars – natural gas	Derivative assets	9		12
Three-way costless collars – oil	Derivative assets	1		1
Basis swaps – natural gas	Derivative assets	82		77
Purchased fixed price swaps – natural gas storage	Derivative assets	1		—
Fixed price swaps – natural gas	Other long-term assets	—		64
Two-way costless collars – natural gas	Other long-term assets	44		100
Three-way costless collars – natural gas	Other long-term assets	12		37
Three-way costless collars – oil	Other long-term assets	1		3
Basis swaps – natural gas	Other long-term assets	70		22
Interest rate swaps	Other long-term assets	—		2
Total derivative assets		$	230	$	411

Derivative Liabilities
		Fair Value
(in millions)	Balance Sheet Classification	March 31, 2022		December 31, 2021
Derivatives not designated as hedging instruments:
Fixed price swaps – natural gas storage	Derivative liabilities	$	—	$	1
Fixed price swaps – natural gas	Derivative liabilities	1,999		565
Fixed price swaps – oil	Derivative liabilities	101		60
Fixed price swaps – ethane	Derivative liabilities	28		10
Fixed price swaps – propane	Derivative liabilities	122		78
Fixed price swaps – normal butane	Derivative liabilities	44		27
Fixed price swaps – natural gasoline	Derivative liabilities	59		33
Two-way costless collars – natural gas	Derivative liabilities	316		104
Two-way costless collars – ethane	Derivative liabilities	—		1
Three-way costless collars – natural gas	Derivative liabilities	977		298
Three-way costless collars – oil	Derivative liabilities	49		24
Three-way costless collars – propane	Derivative liabilities	6		4
Basis swaps – natural gas	Derivative liabilities	43		9
Call options – natural gas	Derivative liabilities	201		67
Fixed price swaps – natural gas	Long-term derivative liabilities	522		246
Fixed price swaps – oil	Long-term derivative liabilities	21		9
Fixed price swaps – ethane	Long-term derivative liabilities	1		—
Fixed price swaps – propane	Long-term derivative liabilities	4		1
Fixed price swaps – normal butane	Long-term derivative liabilities	2		—
Fixed price swaps – natural gasoline	Long-term derivative liabilities	3		1
Two-way costless collars – natural gas	Long-term derivative liabilities	190		115
Three-way costless collars – natural gas	Long-term derivative liabilities	195		178
Three-way costless collars – oil	Long-term derivative liabilities	27		21
Basis swap – natural gas	Long-term derivative liabilities	5		22
Call options – natural gas	Long-term derivative liabilities	57		42
Total derivative liabilities		$	4,972	$	1,916

Net Derivative Position
	March 31, 2022		December 31, 2021
(in millions)
Net current derivative liabilities	$	(3,842)	$	(1,098)
Net long-term derivative liabilities	(900)		(407)
Non-performance risk adjustment	8		3
Net total derivative liabilities	$	(4,734)	$	(1,502)

Summary of Before Tax Effect of Fair Value Hedges not Designated for Hedge Accounting

The following tables summarize the before-tax effect of the Company’s derivative instruments on the consolidated statements of operations for the three months ended March 31, 2022 and 2021:

Unsettled Gain (Loss) on Derivatives Recognized in Earnings
	Consolidated Statement of Operations Classification of Gain (Loss) on Derivatives, Unsettled	For the three months ended March 31,
Derivative Instrument		2022		2021
		(in millions)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	(1,853)	$	(22)
Fixed price swaps – oil	Gain (Loss) on Derivatives	(53)		(40)
Fixed price swaps – ethane	Gain (Loss) on Derivatives	(21)		(2)
Fixed price swaps – propane	Gain (Loss) on Derivatives	(49)		(45)
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	(20)		(15)
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	(28)		(20)
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	(342)		(12)
Two-way costless collars – oil	Gain (Loss) on Derivatives	—		(1)
Two-way costless collars – ethane	Gain (Loss) on Derivatives	1		—
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	(724)		—
Three-way costless collars – oil	Gain (Loss) on Derivatives	(33)		(18)
Three-way costless collars – propane	Gain (Loss) on Derivatives	(2)		(1)
Basis swaps – natural gas	Gain (Loss) on Derivatives	36		3
Call options – natural gas	Gain (Loss) on Derivatives	(149)		3
Call options – oil	Gain (Loss) on Derivatives	—		(1)
Swaptions – natural gas	Gain (Loss) on Derivatives	—		1
Purchased fixed price swap – natural gas storage	Gain (Loss) on Derivatives	1		—
Fixed price swap – natural gas storage	Gain (Loss) on Derivatives	1		—
Interest rate swaps	Gain (Loss) on Derivatives	(2)		1
Total loss on unsettled derivatives		$	(3,237)	$	(169)
Settled Gain (Loss) on Derivatives Recognized in Earnings (1)
	Consolidated Statement of Operations Classification of Gain (Loss) on Derivatives, Settled	For the three months ended March 31,
Derivative Instrument		2022		2021
		(in millions)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	(297)	$	5
Fixed price swaps – oil	Gain (Loss) on Derivatives	(33)		(17)
Fixed price swaps – ethane	Gain (Loss) on Derivatives	(8)		(4)
Fixed price swaps – propane	Gain (Loss) on Derivatives	(41)		(30)
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	(14)		(7)
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	(19)		(9)
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	(104)		2
Two-way costless collars – oil	Gain (Loss) on Derivatives	—		(1)
Two-way costless collars – ethane	Gain (Loss) on Derivatives	(1)		—
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	(121)		1
Three-way costless collars – oil	Gain (Loss) on Derivatives	(13)		(1)
Three-way costless collars – propane	Gain (Loss) on Derivatives	(2)		—
Basis swaps – natural gas	Gain (Loss) on Derivatives	1		41
Index swaps – natural gas	Gain (Loss) on Derivatives	(1)		—
Call options – natural gas	Gain (Loss) on Derivatives	(39)		—
Put options – natural gas	Gain (Loss) on Derivatives	—		(2)		(2)
Fixed price swaps – natural gas storage	Gain (Loss) on Derivatives	(3)		—
Total loss on settled derivatives		$	(695)	$	(22)

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

(2)Includes $2 million in amortization of premiums paid related to certain natural gas put options for the three months ended March 31, 2021, which is included in gain (loss) on derivatives on the consolidated statements of operations.

Total Gain (Loss) on Derivatives Recognized in Earnings
	For the three months ended March 31,
	2022		2021
	(in millions)
Total loss on unsettled derivatives	$	(3,237)	$	(169)
Total loss on settled derivatives	(695)		(22)
Non-performance risk adjustment	5		—
Total loss on derivatives	$	(3,927)	$	(191)