Document_and_Entity_Informatio
Document and Entity Information (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Document and Entity Information | ' |
Entity Registrant Name | 'California Resources Corp |
Entity Central Index Key | '0001609253 |
Document Type | '10-Q |
Document Period End Date | 30-Sep-14 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--12-31 |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 1,000 |
Common stock, per share par value (in dollars per share) | $0.01 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q3 |
COMBINED_AND_CONSOLIDATED_COND
COMBINED AND CONSOLIDATED CONDENSED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $105 | $0 |
Trade receivables, net | 441 | 30 |
Inventories | 72 | 75 |
Other current assets | 279 | 149 |
Total current assets | 897 | 254 |
PROPERTY, PLANT AND EQUIPMENT | 22,580 | 20,972 |
Accumulated depreciation, depletion and amortization | -7,855 | -6,964 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET | 14,725 | 14,008 |
OTHER ASSETS | 35 | 35 |
TOTAL ASSETS | 15,657 | 14,297 |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 584 | 448 |
Accrued liabilities | 268 | 241 |
Total current liabilities | 852 | 689 |
DEFERRED INCOME TAXES | 3,404 | 3,122 |
OTHER LONG-TERM LIABILITIES | 532 | 497 |
Liabilities, Noncurrent, Total | 3,936 | 3,619 |
NET INVESTMENT | ' | ' |
Net parent company investment | 10,891 | 10,013 |
Accumulated other comprehensive income | -22 | -24 |
Total net investment | 10,869 | 9,989 |
TOTAL LIABILITIES AND NET INVESTMENT | 15,657 | 14,297 |
Pro Forma | ' | ' |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | 105 | ' |
Trade receivables, net | 441 | ' |
Inventories | 72 | ' |
Other current assets | 279 | ' |
Total current assets | 897 | ' |
PROPERTY, PLANT AND EQUIPMENT | 22,580 | ' |
Accumulated depreciation, depletion and amortization | -7,855 | ' |
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET | 14,725 | ' |
OTHER ASSETS | 35 | ' |
TOTAL ASSETS | 15,657 | ' |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 584 | ' |
Accrued liabilities | 268 | ' |
Dividend payable to Occidental | 6,000 | ' |
Total current liabilities | 6,852 | ' |
DEFERRED INCOME TAXES | 3,404 | ' |
OTHER LONG-TERM LIABILITIES | 532 | ' |
Liabilities, Noncurrent, Total | 3,936 | ' |
NET INVESTMENT | ' | ' |
Net parent company investment | 4,891 | ' |
Accumulated other comprehensive income | -22 | ' |
Total net investment | 4,869 | ' |
TOTAL LIABILITIES AND NET INVESTMENT | $15,657 | ' |
COMBINED_AND_CONSOLIDATED_COND1
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
REVENUES | ' | ' | ' | ' |
Oil and gas net sales to related parties | $421 | $1,040 | $2,560 | $3,027 |
Oil and gas net sales to third parties | 630 | 20 | 678 | 63 |
Other revenue | 41 | 47 | 115 | 115 |
TOTAL REVENUES | 1,092 | 1,107 | 3,353 | 3,205 |
COSTS AND OTHER DEDUCTIONS | ' | ' | ' | ' |
Production costs | 262 | 244 | 780 | 717 |
Selling, general and administrative expenses | 87 | 73 | 243 | 212 |
Depreciation, depletion and amortization | 304 | 288 | 886 | 853 |
Taxes other than on income | 56 | 32 | 163 | 141 |
Exploration expense | 25 | 41 | 71 | 81 |
Other Expenses | 39 | 37 | 109 | 106 |
TOTAL COSTS AND OTHER DEDUCTIONS | 773 | 715 | 2,252 | 2,110 |
INCOME BEFORE INCOME TAXES | 319 | 392 | 1,101 | 1,095 |
Provision for income taxes | -131 | -157 | -444 | -438 |
NET INCOME | $188 | $235 | $657 | $657 |
COMBINED_AND_CONSOLIDATED_COND2
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |||
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' | |||
NET INCOME | $188 | $235 | $657 | $657 | |||
Other comprehensive income (loss) items: | ' | ' | ' | ' | |||
Unrealized losses on derivatives | ' | -1 | [1] | -2 | [1] | -1 | [1] |
Pension and postretirement gains | ' | 1 | [2] | 1 | [2] | 3 | [2] |
Reclassification to income of realized losses (gains) on derivatives | ' | ' | 3 | [3] | -1 | [3] | |
Other comprehensive income, net of tax | ' | ' | 2 | 1 | |||
Comprehensive income | $188 | $235 | $659 | $658 | |||
[1] | Net of tax of zero for each of the three months ended September 30, 2014 and 2013, and $1 and zero for the nine months ended September 30, 2014 and 2013, respectively. | ||||||
[2] | Net of tax of zero and $(1) for the three months ended September 30, 2014 and 2013, respectively, and zero and $(2) for the nine months ended September 30, 2014 and 2013. | ||||||
[3] | Net of tax of zero for each of the three months ended September 30, 2014 and 2013, and $(2) and $1 for the nine months ended September 30, 2014 and 2013, respectively. |
COMBINED_AND_CONSOLIDATED_COND3
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' |
Unrealized losses on derivatives, tax | $0 | $0 | $1 | $0 |
Pension and postretirement gains, tax | 0 | -1 | 0 | -2 |
Reclassification to income of realized losses (gains) on derivatives, tax | $0 | $0 | ($2) | $1 |
COMBINED_AND_CONSOLIDATED_COND4
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CASH FLOW FROM OPERATING ACTIVITIES | ' | ' |
NET INCOME | $657 | $657 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation, depletion and amortization | 886 | 853 |
Deferred income tax provision | 262 | 197 |
Other noncash charges to income | 22 | 42 |
Dry hole expenses | 52 | 51 |
Changes in operating assets and liabilities, net | 12 | 103 |
Net cash provided by operating activities | 1,891 | 1,903 |
CASH FLOW FROM INVESTING ACTIVITIES | ' | ' |
Capital expenditures | -1,569 | -1,180 |
Acquisitions and other | -69 | -35 |
Net cash used by investing activities | -1,638 | -1,215 |
CASH FLOW FROM FINANCING ACTIVITIES | ' | ' |
Distributions to Occidental, net | -148 | -688 |
Net cash used by financing activities | -148 | -688 |
Increase in cash and cash equivalents | 105 | ' |
Cash and cash equivalents-beginning of period | 0 | ' |
Cash and cash equivalents-end of period | $105 | ' |
COMBINED_AND_CONSOLIDATED_COND5
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Parenthitical) (USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Aug. 31, 2014 |
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ' |
Transfer of trade receivables | $400 |
Transfer of Liabilities and Accruals | $80 |
The_SpinOff_And_Summary_Of_Sig
The Spin-Off And Summary Of Significant Accounting Policies | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
NOTE 1.THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
The Separation and Spin-Off | ||||||||||||||
On February 14, 2014, Occidental Petroleum Corporation (Occidental) announced that its board of directors had authorized management to pursue the spin-off of the California business, into a stand-alone, publicly traded company. On October 2, 2014 our board of directors and Occidental’s board of directors each approved execution of the spin-off in accordance with a Separation and Distribution Agreement and several other agreements. In conjunction with the spin-off, Occidental received a private letter ruling from the Internal Revenue Service to the effect that based on certain facts, assumptions, representations, and understandings set forth in the ruling, certain aspects of the transactions that will be undertaken in preparation for, or in connection with, the spin-off will not cause the distribution to be taxable to Occidental or its affiliates. Occidental intends to distribute, on a pro rata basis, at least 80.1% of our common stock to the Occidental stockholders as of the record date for the spin-off. Upon completion of the spin-off, we will be an independent publicly traded company. The spin-off is, among other things, subject to the satisfaction or waiver by Occidental, in its sole discretion, of certain conditions to the spin-off. Each Occidental shareholder will receive 0.4 of a share of our stock for every one share of Occidental stock held at the close of business on the record date of November 17, 2014. Our registration statement on Form 10 describing the spin-off was declared effective by the U.S. Securities and Exchange Commission (SEC) on October 16, 2014. | ||||||||||||||
We are an oil and gas exploration and production company operating properties exclusively within the State of California. Additionally, we gather, process and market oil and gas products, and produce and sell power. We were incorporated in Delaware as a wholly-owned subsidiary of Occidental on April 23, 2014. During September 2014, Occidental transferred to us certain material existing assets, operations and liabilities of the California business. Prior to the spin-off we will have distributed to Occidental approximately $6.0 billion, any cash on our balance sheet immediately prior to the spin-off and settled any outstanding loans with Occidental existing as of the date of the spin-off, generally from the debt proceeds discussed in Note 8. | ||||||||||||||
Except when the context otherwise requires or where otherwise indicated, (1) all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries or the California business, (2) all references to the ‘‘California business’’ refer to Occidental’s California oil and gas exploration and production operations and related assets, liabilities and obligations, which we either have assumed or will assume in connection with the spin-off, and (3) all references to ‘‘Occidental’’ refer to Occidental Petroleum Corporation, our parent company, and its subsidiaries, other than us. | ||||||||||||||
Basis of Presentation | ||||||||||||||
The accompanying combined and consolidated condensed financial statements were prepared in connection with the spin-off and were derived from the consolidated financial statements and accounting records of Occidental. These combined and consolidated condensed financial statements reflect the historical results of operations, financial position and cash flows of the California business. We account for our share of oil and gas exploration and production ventures, in which we have a direct working interest, by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on the balance sheets and statements of income and cash flows. | ||||||||||||||
The combined and consolidated statements of income for periods prior to the spin-off include expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. These allocations are based primarily on specific identification of time or activities associated with us, employee headcount or our relative size compared to Occidental. Our management believes the assumptions underlying the combined and consolidated condensed financial statements, including the assumptions regarding allocating expenses from Occidental, are reasonable. However, the financial statements may not include all of the actual expenses that would have been incurred, may include duplicative costs and may not reflect our combined and consolidated results of operations, financial position and cash flows had we operated as a stand-alone public company during the periods presented. Actual costs that would have been incurred if we had been a stand-alone company prior to the spin-off would depend on multiple factors, including organizational structure and strategic and operating decisions. There may be some additional non-recurring costs of operating as a stand-alone company, which are not expected to be material. | ||||||||||||||
The assets and liabilities in the combined and consolidated financial statements are presented on a historical cost basis. We have eliminated all of our significant intercompany transactions and accounts. We have historically participated in Occidental’s centralized treasury management program and not incurred any debt. Prior to September 2014, excess cash generated by our business was distributed to Occidental, and our cash needs were provided by Occidental, in the form of a contribution. Starting September 2014, we are no longer distributing our excess cash to Occidental and Occidental agreed to provide us a line of credit for our cash needs, through the spin-off, at an annual interest rate of 0.36%. As part of the spin-off, we expect to pay to Occidental any balance on the line of credit and any cash on our balance sheet immediately prior to the spin-off date. There was not any balance due to Occidental under the line of credit as of September 30, 2014. | ||||||||||||||
In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2014, and the statements of income, comprehensive income, and cash flows for the three and nine months ended September 30, 2014 and 2013, as applicable. The income and cash flows for the periods ended September 30, 2014 and 2013 are not necessarily indicative of the income or cash flows you should expect for the full year. | ||||||||||||||
Certain prior year amounts have been reclassified to conform to the 2014 presentation. | ||||||||||||||
We have prepared this report pursuant to the rules and regulations of the SEC applicable to interim financial information, which permit omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. You should read this Form 10-Q together with our annual financial statements for the year ended December 31, 2013, included in our registration statement on Form 10. | ||||||||||||||
In a manner similar to initial public offerings, we have included the effect of dividends to be paid to Occidental prior to the spin-off without other spin-off effects in the Pro Forma Adjusted September 30, 2014 Combined and Consolidated Condensed Balance Sheet. | ||||||||||||||
Share and Earnings Per Share Information | ||||||||||||||
Immediately after the completion of the spin-off, we will issue and have outstanding no more than approximately 387 million shares in aggregate, or 0.4994 of a share of CRC stock for each Occidental share outstanding at the related record date. This estimate is based on approximately 775 million shares of Occidental common stock outstanding as of September 30, 2014, and assuming distribution of at least 80.1% of our common stock to shareholders of Occidental using a ratio of 0.4 of a share of CRC stock for each share of Occidental common stock. As a result, we expect to distribute approximately 310 million shares to Occidental shareholders, with the remaining outstanding shares to be retained by Occidental. The actual number of shares of our common stock to be distributed will be calculated on November 17, 2014, the record date. Occidental will dispose of the remaining up to 19.9% of CRC common stock within eighteen months following the spin-off. | ||||||||||||||
The following table presents the calculation of pro forma basic and diluted EPS for the three and nine months ended September 30, 2014 and 2013, based on the most recently available number of Occidental common shares outstanding, using the distribution mechanics described above: | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(in millions, except per-share amounts) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Net income | $ | 188 | $ | 235 | $ | 657 | $ | 657 | ||||||
Number of basic and diluted shares | 387 | 387 | 387 | 387 | ||||||||||
Basic and diluted EPS | $ | 0.49 | $ | 0.61 | $ | 1.70 | $ | 1.70 | ||||||
We estimate a de minimis impact from dilutive shares, including from any underlying share-based awards issued in connection with the replacement of outstanding Occidental share-based awards. However, the actual number of dilutive shares will not be determined until after the spin-off. | ||||||||||||||
Capitalization | ||||||||||||||
The following table sets forth (i) our historical capitalization as of September 30, 2014 and (ii) our pro forma adjusted capitalization assuming the incurrence of debt and the distributions to Occidental were effective as of September 30, 2014: | ||||||||||||||
September 30, 2014 | ||||||||||||||
Historical | Pro Forma Adjusted | |||||||||||||
(in millions) | ||||||||||||||
Debt Outstanding | ||||||||||||||
Long-term debt: | ||||||||||||||
Revolving Credit Facility | $ | — | $ | 65 | ||||||||||
Term Loan Facility | — | 1,000 | ||||||||||||
5% notes due 2020 | — | 1,000 | ||||||||||||
5 1/2% notes due 2021 | — | 1,750 | ||||||||||||
6% notes due 2024 | — | 2,250 | ||||||||||||
Total Debt Outstanding | — | 6,065 | ||||||||||||
Net Investment / Stockholder’s Equity | ||||||||||||||
Common stock, par value $0.01 | — | 4 | ||||||||||||
Additional paid-in capital | — | 4,887 | ||||||||||||
Net investment | 10,891 | — | ||||||||||||
Accumulated other comprehensive income (loss) | (22 | ) | (22 | ) | ||||||||||
Net Investment / Stockholder’s Equity | 10,869 | 4,869 | ||||||||||||
Total Capitalization | $ | 10,869 | $ | 10,934 | ||||||||||
We expect to borrow an additional $300 million to $350 million under our revolving credit facility, including borrowings of approximately $200 million we expect to incur prior to the spin-off to repay Occidental for the acquisition of oil and gas properties and between $100 million and $150 million of borrowings that we expect to incur concurrently with, or shortly after, the spin-off to fund our working capital requirements as a stand-alone company. As of September 30, 2014, on a pro forma basis giving effect to the incurrence of debt, the spin-off, the $6 billion of distributions to Occidental and these additional $300 million to $350 million of borrowings, we expect to have the ability to incur from $1.585 billion to $1.635 billion of additional borrowings under our revolving credit facility. | ||||||||||||||
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventories | ' | |||||||
INVENTORIES | ' | |||||||
NOTE 2.INVENTORIES | ||||||||
Inventories as of September 30, 2014 and December 31, 2013, consisted of the following (in millions): | ||||||||
2014 | 2013 | |||||||
Materials and supplies | $ | 64 | $ | 73 | ||||
Finished goods | 8 | 2 | ||||||
Total | $ | 72 | $ | 75 | ||||
Other_Information
Other Information | 9 Months Ended |
Sep. 30, 2014 | |
OTHER INFORMATION | ' |
OTHER INFORMATION | ' |
NOTE 3.OTHER INFORMATION | |
Other current assets include amounts due from joint interest partners of approximately $137 million and $97 million at September 30, 2014 and December 31, 2013, respectively. Other long-term liabilities include asset retirement obligations of $380 million and $388 million at September 30, 2014 and December 31, 2013, respectively. | |
Other revenue and other expenses mainly comprise third party sales and the associated costs, respectively, of the portion of electricity generated by our power plant that is sold to third parties. | |
Acquisitions | |
In the third quarter of 2014, we entered into an agreement with a third-party seller to purchase oil and gas properties in the Ventura Basin for approximately $200 million. The acquisition closed during the fourth quarter of 2014. | |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2014 | |
Derivatives | ' |
DERIVATIVES | ' |
NOTE 4.DERIVATIVES | |
Objective & Strategy | |
We only occasionally hedge our oil and gas production, and, when we do so, the volumes are usually insignificant. | |
Cash-Flow Hedges | |
We entered into financial swap agreements in November 2012 for the sale of a portion of our natural gas production. These swap agreements hedged 50 MMcf of natural gas per day beginning in January 2013 and extending through March 2014 and qualified as cash-flow hedges. The weighted-average strike price of these swaps was $4.30. The gross and net fair values of these derivatives as of December 31, 2013 were not material, as determined using Level 2 inputs in the fair value hierarchy. There were no cash-flow hedges as of September 30, 2014. | |
The after-tax gains and losses recognized in, and reclassified to income from, Accumulated Other Comprehensive Income (AOCI) for derivative instruments classified as cash-flow hedges for the nine month periods ended September 30, 2014 and 2013, and the ending AOCI balances for each period were not material. The gains and losses reclassified to income were recognized in net sales, and the amount of the ineffective portion of cash-flow hedges was immaterial for the nine months ended September 30, 2014 and 2013. | |
There were no fair value hedges as of and during the three and nine month periods ended September 30, 2014 and 2013. | |
Lawsuits_Claims_Contingencies_
Lawsuits, Claims, Contingencies And Commitments | 9 Months Ended |
Sep. 30, 2014 | |
LAWSUITS, CLAIMS, CONTINGENCIES AND COMMITMENTS | ' |
Lawsuits, Claims, Contingencies and Commitments | ' |
NOTE 5.LAWSUITS, CLAIMS, CONTINGENCIES AND COMMITMENTS | |
We or certain of our subsidiaries are involved, in the normal course of business, in lawsuits, environmental and other claims and other contingencies that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. We accrue reserves for currently outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Reserve balances at September 30, 2014 and December 31, 2013 were not material to our balance sheets as of such dates. We also evaluate the amount of reasonably possible losses that we could incur as a result of these matters. We believe that reasonably possible losses that we could incur in excess of reserves accrued on our balance sheet would not be material to our consolidated financial position or results of operations. | |
In connection with the spin-off, we will be required to indemnify Occidental for taxes incurred as a result of the failure of the spin-off or certain transactions undertaken in preparation for, or in connection with, the spin-off, to qualify as tax-free transactions under the relevant provisions of the Internal Revenue Code of 1986, as amended, to the extent caused by our breach of certain tax-related representations or covenants made in connection with the spin-off. We also have agreed to pay 50% of any taxes arising from the spin-off or related transactions to the extent that the tax is not attributable to the fault of either party. However, if we receive an increase in the tax basis of our depletable, depreciable or amortizable assets as a result of any such tax being imposed, we will pay to Occidental an amount equal to any reduction in our tax liability attributable to such basis increase at the time such reduction in tax liability arises. In addition, we and Occidental will indemnify each other in a manner principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of the remaining Occidental business with Occidental. | |
Our off-balance sheet contractual obligations as of September 30, 2014, increased by approximately $92 million, or 13% since December 31, 2013. This increase is largely to support our capital program, including to secure drilling rigs, services and transportation commitments. | |
Retirement_and_Postretirement_
Retirement and Postretirement Benefit Plans | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Retirement and Postretirement Benefit Plans | ' | |||||||||||||
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | ' | |||||||||||||
NOTE 6.RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | ||||||||||||||
The following table sets forth the components of the net periodic benefit costs for our defined benefit pension and postretirement benefit plans for the three- and nine-month periods ended September 30, 2014 and 2013 (in millions): | ||||||||||||||
Three months ended September 30, | 2014 | 2013 | ||||||||||||
Net Periodic Benefit Costs | Pension | Postretirement | Pension | Postretirement | ||||||||||
Benefit | Benefit | Benefit | Benefit | |||||||||||
Service cost | $ | 1 | $ | 1 | $ | 1 | $ | 1 | ||||||
Interest cost | 1 | — | 1 | — | ||||||||||
Expected return on plan assets | (1 | ) | — | (1 | ) | — | ||||||||
Recognized actuarial loss | — | 1 | 1 | 1 | ||||||||||
Total | $ | 1 | $ | 2 | $ | 2 | $ | 2 | ||||||
Nine months ended September 30, | 2014 | 2013 | ||||||||||||
Net Periodic Benefit Costs | Pension | Postretirement | Pension | Postretirement | ||||||||||
Benefit | Benefit | Benefit | Benefit | |||||||||||
Service cost | $ | 3 | $ | 3 | $ | 3 | $ | 3 | ||||||
Interest cost | 3 | 2 | 3 | 2 | ||||||||||
Expected return on plan assets | (4 | ) | — | (3 | ) | — | ||||||||
Recognized actuarial loss | 1 | 1 | 3 | 2 | ||||||||||
Total | $ | 3 | $ | 6 | $ | 6 | $ | 7 | ||||||
We did not make any contributions in either of the three- month or nine-month periods ended September 30, 2014 and 2013, to our defined benefit pension plans. | ||||||||||||||
RelatedParty_Transactions
Related-Party Transactions | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
RELATED-PARTY TRANSACTIONS | ' | |||||||||||||
RELATED-PARTY TRANSACTIONS | ' | |||||||||||||
NOTE 7.RELATED-PARTY TRANSACTIONS | ||||||||||||||
During the three- and nine-month periods ended September 30, 2014 and 2013, we entered into the following related-party transactions (in millions): | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Sales | $ | 421 | $ | 1,040 | $ | 2,560 | $ | 3,027 | ||||||
Allocated costs for services provided by affiliates | $ | 43 | $ | 33 | $ | 120 | $ | 100 | ||||||
Purchases | $ | 45 | $ | 43 | $ | 165 | $ | 129 | ||||||
Through July 2014, substantially all of our products were sold to Occidental’s marketing subsidiaries at market prices and were settled at the time of sale to those entities. Beginning August 2014, we started marketing our own products directly to third parties. | ||||||||||||||
The statements of income include expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. Charges from Occidental for these services are reflected in selling, general and administrative expenses. | ||||||||||||||
Purchases from related parties reflect products purchased at market prices from Occidental’s subsidiaries and are used in our operations. These purchases are included in production costs. There are no significant related party receivable or payable balances at September 30, 2014 and 2013. | ||||||||||||||
Starting September 2014, Occidental agreed to provide us a line of credit for our cash needs, through the spin-off, at an annual interest rate of 0.36%. As part of the spin-off, we expect to pay to Occidental any balance on the line of credit and any cash on our balance sheet immediately prior to the spin-off date. There was not any balance due to Occidental under the line of credit as of September 30, 2014. | ||||||||||||||
Debt
Debt | 9 Months Ended |
Sep. 30, 2014 | |
Debt | ' |
DEBT | ' |
NOTE 8.DEBT | |
Senior Notes | |
On October 1, 2014, we issued $5.00 billion in aggregate principal amount of our senior notes, including $1.00 billion of 5% senior notes due January 15, 2020 (the 2020 notes), $1.75 billion of 5 1/2% senior notes due September 15, 2021 (the 2021 notes) and $2.25 billion of 6% senior notes due November 15, 2024 (the “2024 notes” and together with the 2020 notes and the 2021 notes, the ‘‘notes’’), in a private placement. The notes were issued at par and initially are fully and unconditionally guaranteed on a senior unsecured basis by all of our material subsidiaries. We used the net proceeds from the private placement to make a $4.95 billion cash distribution to Occidental in October 2014. | |
We will pay interest on the 2020 notes semi-annually in cash in arrears on January 15 and July 15 of each year, beginning on July 15, 2015. We will pay interest on the 2021 notes semi-annually in cash in arrears on March 15 and September 15 of each year, beginning on March 15, 2015. We will pay interest on the 2024 notes semi-annually in cash in arrears on May 15 and November 15 of each year, beginning on May 15, 2015. | |
In connection with the private placement of the notes, we granted the initial purchasers certain registration rights under a registration rights agreement. The indenture governing the notes also provides for special mandatory redemption if Occidental does not complete the spin-off on or prior to January 31, 2015, at a redemption price equal to the issue price plus accrued and unpaid interest. | |
Credit Facilities | |
On September 24, 2014, we entered into a credit agreement with a syndicate of lenders (the Credit Agreement), providing for (i) a senior term loan facility (the Term Loan Facility) and (ii) a senior revolving loan facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”). The Credit Facilities mature on the fifth anniversary of the date the initial aggregate commitment under the Term Loan is funded and the commitments under the Revolving Facility become available for borrowings (the Funding Date). Any borrowings under these facilities will be subject to certain customary conditions. | |
The aggregate initial commitments of the lenders under the Revolving Credit Facility are $2.0 billion and under the Term Loan Facility are $1.0 billion. The Revolving Credit Facility includes a sub-limit of $400 million for the issuance of letters of credit. We expect the Funding Date to occur prior to the spin-off. We will be required to repay the Term Loan Facility in equal quarterly installments equal to 2.5% (10.00% per annum) of the principal amount of the Term Loan Facility beginning on March 31, 2016. We intend to use proceeds from the Credit Facilities to make a $1.05 billion distribution to Occidental prior to the spin-off, settle any outstanding loans with Occidental as of the date of the spin-off and fund any working capital needs. | |
If the spin-off is not consummated by January 31, 2015 and within five business days after the Funding Date, the Credit Facilities will automatically terminate and all amounts thereunder will become due and payable. | |
Borrowings under the Credit Facilities will bear interest at either a LIBOR rate or an alternate base rate (equal to the greatest of (i) the administrative agent’s prime rate, (ii) the one-month LIBOR rate plus 1.00% and (iii) the federal funds effective rate plus 0.50%), at our election, in each case plus an applicable margin. This applicable margin is based on our most recent leverage ratio and will vary from (a) in the case of LIBOR loans, 1.50% to 2.25% and (b) in the case of alternate base rate loans, from 0.50% to 1.25%. The unused portion of the Revolving Credit Facility is subject to commitment fees ranging from 0.30% to 0.50% per annum. | |
All obligations under the Credit Facilities initially will be guaranteed jointly and severally by all of our wholly-owned material subsidiaries, and will be unsecured while we maintain our credit ratings at the minimum levels defined in the Credit Agreement. The assets and liabilities of subsidiaries not guaranteeing the debt are de minimis. | |
The Credit Agreement will also require us to maintain the following financial covenants evidenced as of the last day of each fiscal quarter: (a) a leverage ratio of no more than 4.50 to 1.00 and (b) an interest expense ratio of no less than 2.50 to 1.00. | |
The_SpinOff_And_Summary_Of_Sig1
The Spin-Off And Summary Of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying combined and consolidated condensed financial statements were prepared in connection with the spin-off and were derived from the consolidated financial statements and accounting records of Occidental. These combined and consolidated condensed financial statements reflect the historical results of operations, financial position and cash flows of the California business. We account for our share of oil and gas exploration and production ventures, in which we have a direct working interest, by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on the balance sheets and statements of income and cash flows. | |
The combined and consolidated statements of income for periods prior to the spin-off include expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. These allocations are based primarily on specific identification of time or activities associated with us, employee headcount or our relative size compared to Occidental. Our management believes the assumptions underlying the combined and consolidated condensed financial statements, including the assumptions regarding allocating expenses from Occidental, are reasonable. However, the financial statements may not include all of the actual expenses that would have been incurred, may include duplicative costs and may not reflect our combined and consolidated results of operations, financial position and cash flows had we operated as a stand-alone public company during the periods presented. Actual costs that would have been incurred if we had been a stand-alone company prior to the spin-off would depend on multiple factors, including organizational structure and strategic and operating decisions. There may be some additional non-recurring costs of operating as a stand-alone company, which are not expected to be material. | |
The assets and liabilities in the combined and consolidated financial statements are presented on a historical cost basis. We have eliminated all of our significant intercompany transactions and accounts. We have historically participated in Occidental’s centralized treasury management program and not incurred any debt. Prior to September 2014, excess cash generated by our business was distributed to Occidental, and our cash needs were provided by Occidental, in the form of a contribution. Starting September 2014, we are no longer distributing our excess cash to Occidental and Occidental agreed to provide us a line of credit for our cash needs, through the spin-off, at an annual interest rate of 0.36%. As part of the spin-off, we expect to pay to Occidental any balance on the line of credit and any cash on our balance sheet immediately prior to the spin-off date. There was not any balance due to Occidental under the line of credit as of September 30, 2014. | |
In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2014, and the statements of income, comprehensive income, and cash flows for the three and nine months ended September 30, 2014 and 2013, as applicable. The income and cash flows for the periods ended September 30, 2014 and 2013 are not necessarily indicative of the income or cash flows you should expect for the full year. | |
Certain prior year amounts have been reclassified to conform to the 2014 presentation. | |
We have prepared this report pursuant to the rules and regulations of the SEC applicable to interim financial information, which permit omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. You should read this Form 10-Q together with our annual financial statements for the year ended December 31, 2013, included in our registration statement on Form 10. | |
In a manner similar to initial public offerings, we have included the effect of dividends to be paid to Occidental prior to the spin-off without other spin-off effects in the Pro Forma Adjusted September 30, 2014 Combined and Consolidated Condensed Balance Sheet. | |
The_Spin_off_And_Summary_Of_Si
The Spin off And Summary Of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
Schedule of basic and diluted EPS | ' | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(in millions, except per-share amounts) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Net income | $ | 188 | $ | 235 | $ | 657 | $ | 657 | ||||||
Number of basic and diluted shares | 387 | 387 | 387 | 387 | ||||||||||
Basic and diluted EPS | $ | 0.49 | $ | 0.61 | $ | 1.70 | $ | 1.70 | ||||||
Schedule of capitalization | ' | |||||||||||||
September 30, 2014 | ||||||||||||||
Historical | Pro Forma Adjusted | |||||||||||||
(in millions) | ||||||||||||||
Debt Outstanding | ||||||||||||||
Long-term debt: | ||||||||||||||
Revolving Credit Facility | $ | — | $ | 65 | ||||||||||
Term Loan Facility | — | 1,000 | ||||||||||||
5% notes due 2020 | — | 1,000 | ||||||||||||
5 1/2% notes due 2021 | — | 1,750 | ||||||||||||
6% notes due 2024 | — | 2,250 | ||||||||||||
Total Debt Outstanding | — | 6,065 | ||||||||||||
Net Investment / Stockholder’s Equity | ||||||||||||||
Common stock, par value $0.01 | — | 4 | ||||||||||||
Additional paid-in capital | — | 4,887 | ||||||||||||
Net investment | 10,891 | — | ||||||||||||
Accumulated other comprehensive income (loss) | (22 | ) | (22 | ) | ||||||||||
Net Investment / Stockholder’s Equity | 10,869 | 4,869 | ||||||||||||
Total Capitalization | $ | 10,869 | $ | 10,934 | ||||||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventories | ' | |||||||
Inventories (in millions) | ' | |||||||
2014 | 2013 | |||||||
Materials and supplies | $ | 64 | $ | 73 | ||||
Finished goods | 8 | 2 | ||||||
Total | $ | 72 | $ | 75 | ||||
Retirement_and_Postretirement_1
Retirement and Postretirement Benefit Plans (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Retirement and Postretirement Benefit Plans | ' | |||||||||||||
Components of the net periodic benefit cost (in millions) | ' | |||||||||||||
Three months ended September 30, | 2014 | 2013 | ||||||||||||
Net Periodic Benefit Costs | Pension | Postretirement | Pension | Postretirement | ||||||||||
Benefit | Benefit | Benefit | Benefit | |||||||||||
Service cost | $ | 1 | $ | 1 | $ | 1 | $ | 1 | ||||||
Interest cost | 1 | — | 1 | — | ||||||||||
Expected return on plan assets | (1 | ) | — | (1 | ) | — | ||||||||
Recognized actuarial loss | — | 1 | 1 | 1 | ||||||||||
Total | $ | 1 | $ | 2 | $ | 2 | $ | 2 | ||||||
Nine months ended September 30, | 2014 | 2013 | ||||||||||||
Net Periodic Benefit Costs | Pension | Postretirement | Pension | Postretirement | ||||||||||
Benefit | Benefit | Benefit | Benefit | |||||||||||
Service cost | $ | 3 | $ | 3 | $ | 3 | $ | 3 | ||||||
Interest cost | 3 | 2 | 3 | 2 | ||||||||||
Expected return on plan assets | (4 | ) | — | (3 | ) | — | ||||||||
Recognized actuarial loss | 1 | 1 | 3 | 2 | ||||||||||
Total | $ | 3 | $ | 6 | $ | 6 | $ | 7 | ||||||
RelatedParty_Transactions_Tabl
Related-Party Transactions (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
RELATED-PARTY TRANSACTIONS | ' | |||||||||||||
Schedule of Related-Party Transactions (in millions) | ' | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Sales | $ | 421 | $ | 1,040 | $ | 2,560 | $ | 3,027 | ||||||
Allocated costs for services provided by affiliates | $ | 43 | $ | 33 | $ | 120 | $ | 100 | ||||||
Purchases | $ | 45 | $ | 43 | $ | 165 | $ | 129 | ||||||
The_SpinOff_And_Summary_Of_Sig2
The Spin-Off And Summary Of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||||||||||||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Oct. 01, 2014 | Oct. 01, 2014 | Oct. 01, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
5.00% Senior notes due 2020 | 5.50% Senior notes due 2021 | 6.00% Senior notes due 2024 | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Pro Forma | Pro Forma | Pro Forma | Pro Forma | Pro Forma | Pro Forma | Spinoff - CRC | Spinoff - CRC | Spinoff - CRC | Spinoff - CRC | Spinoff - CRC | Spinoff - CRC | ||||||
Credit Facilities | Minimum Member | Minimum Member | Maximum Member | Maximum Member | Revolving credit facility | Term loan facility | 5.00% Senior notes due 2020 | 5.50% Senior notes due 2021 | 6.00% Senior notes due 2024 | Maximum Member | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | ||||||||||||
Revolving credit facility | Revolving credit facility | Occidental Petroleum And Subsidiaries | Minimum Member | Maximum Member | ||||||||||||||||||||||
Separation and Spin Off Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of shares to be distributed to shareholders upon spin-off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.10% | ' |
Period in which Occidental plans to dispose of the remaining 19.9% of CRC shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' |
Ratio of shares of common stock to be distributed to shareholders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.4 | ' | ' | ' |
Cash dividend to be paid to Occidental prior to spin-off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,000,000,000 | ' | ' | ' |
Basis of Presentation Abstract | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.36% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares to be distributed to shareholders upon spin off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 310 | ' | ' | ' |
Number of shares to be outstanding upon spin-off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 775 | ' | 387 |
CRC Outstanding shares ratio to Occidental shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.4994 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CRC percentage of shares to be disposed within 18 months following the spin-off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19.9 | ' | ' | ' | ' | ' |
Earnings Per Share, Basic and Diluted. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 188,000,000 | 235,000,000 | 657,000,000 | 657,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of basic and diluted shares | 387 | 387 | 387 | 387 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic and diluted EPS | $0.49 | $0.61 | $1.70 | $1.70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long Term Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Debt Outstanding | ' | ' | ' | ' | ' | 1,000,000,000 | 1,750,000,000 | 2,250,000,000 | ' | ' | ' | ' | ' | ' | 6,065,000,000 | ' | 1,000,000,000 | 1,000,000,000 | 1,750,000,000 | 2,250,000,000 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | 5.00% | 5.50% | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding under revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Investment/Stockholder's Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Par or Stated Value Per Share | $0.01 | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional paid-in capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,887,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment | 10,891,000,000 | ' | 10,891,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) | -22,000,000 | ' | -22,000,000 | ' | -24,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -22,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Investment / Stockholder's Equity | 10,869,000,000 | ' | 10,869,000,000 | ' | 9,989,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,869,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Capitalization | 10,869,000,000 | ' | 10,869,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,934,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional borrowings under revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000,000 | ' | 350,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment to Occidental for acquisition of oil and gas properties | ' | ' | ' | ' | ' | ' | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds held for working capital needs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | 150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding under revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional borrowings available under revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,585,000,000 | ' | $1,635,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventories | ' | ' |
Materials and supplies | $64 | $73 |
Finished goods | 8 | 2 |
Total | $72 | $75 |
Other_Information_Details
Other Information (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
In Millions, unless otherwise specified | Ventura Basin | ||
Amount due from joint interest partners included in Other current assets | $137 | $97 | ' |
Asset retirement obligations included in Other long-term liabilities | 380 | 388 | ' |
Purchase agreement for acquisition of oil and gas properties | ' | ' | $200 |
Derivatives_Details
Derivatives (Details) | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Nov. 30, 2012 |
Cash Flow Hedges | Fair Value Hedges | Fair Value Hedges | Natural Gas Swaps Through March 2014 | |
contract | contract | contract | ||
Derivatives | ' | ' | ' | ' |
Daily volume (in cubic feet) | ' | ' | ' | 50,000,000 |
Weighted-average strike price (in dollars per cubic foot) | ' | ' | ' | 0.0043 |
Number of hedges | 0 | 0 | 0 | ' |
Lawsuits_Claims_Contingencies_1
Lawsuits, Claims, Contingencies and Commitments (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
LAWSUITS, CLAIMS, CONTINGENCIES AND COMMITMENTS | ' |
Tax liability share percentage | 50.00% |
Increase in off-balance sheet contractual obligations | $92 |
Increase in off-balance sheet contractual obligations (as a percentage) | 13.00% |
Retirement_and_Postretirement_2
Retirement and Postretirement Benefit Plans (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Net periodic benefit costs: | ' | ' | ' | ' |
Employer contributions | $0 | $0 | $0 | $0 |
Pension Benefit | ' | ' | ' | ' |
Net periodic benefit costs: | ' | ' | ' | ' |
Service cost | 1,000,000 | 1,000,000 | 3,000,000 | 3,000,000 |
Interest cost | 1,000,000 | 1,000,000 | 3,000,000 | 3,000,000 |
Expected return on plan assets | -1,000,000 | -1,000,000 | -4,000,000 | -3,000,000 |
Recognized actuarial loss | ' | 1,000,000 | 1,000,000 | 3,000,000 |
Net periodic benefit cost | 1,000,000 | 2,000,000 | 3,000,000 | 6,000,000 |
Postretirement Benefit | ' | ' | ' | ' |
Net periodic benefit costs: | ' | ' | ' | ' |
Service cost | 1,000,000 | 1,000,000 | 3,000,000 | 3,000,000 |
Interest cost | ' | ' | 2,000,000 | 2,000,000 |
Recognized actuarial loss | 1,000,000 | 1,000,000 | 1,000,000 | 2,000,000 |
Net periodic benefit cost | $2,000,000 | $2,000,000 | $6,000,000 | $7,000,000 |
RelatedParty_Transactions_Deta
Related-Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net sales to related parties | $421 | $1,040 | $2,560 | $3,027 |
Occidental Petroleum And Subsidiaries | ' | ' | ' | ' |
Net sales to related parties | 421 | 1,040 | 2,560 | 3,027 |
Allocated costs for services provided by affiliates | 43 | 33 | 120 | 100 |
Purchases | 45 | 43 | 165 | 129 |
Credit Facilities | ' | ' | ' | ' |
Interest | 0.36% | ' | 0.36% | ' |
Outstanding borrowings under line of credit | $0 | ' | $0 | ' |
Debt_Details
Debt (Details) (USD $) | 1 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||
Oct. 31, 2014 | Oct. 01, 2014 | Oct. 01, 2014 | Oct. 01, 2014 | Oct. 01, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Mar. 31, 2016 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | Sep. 24, 2014 | |
Senior Notes | 5.00% Senior notes due 2020 | 5.50% Senior notes due 2021 | 6.00% Senior notes due 2024 | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Credit Facilities | Term loan facility | Term loan facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Letter of Credit | ||
LIBOR | Alternate Base Rate | Prime Rate | Federal fund rate | Minimum Member | Minimum Member | Minimum Member | Maximum Member | Maximum Member | Maximum Member | Scenario, Forecast | Minimum Member | Maximum Member | ||||||||||
LIBOR | Alternate Base Rate | LIBOR | Alternate Base Rate | |||||||||||||||||||
Senior Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount | ' | $5,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt | ' | ' | 1,000,000,000 | 1,750,000,000 | 2,250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Proceeds from private placement | ' | 4,950,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash distribution to Occidental | 4,950,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Semi annual interest | ' | 'semi-annually | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior term loan facility and senior revolving loan facility | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 5.00% | 5.50% | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000,000 | ' | 2,000,000,000 | ' | ' | 400,000,000 |
Cash dividend to be paid to Occidental prior to spin-off | ' | ' | ' | ' | ' | $1,050,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount repaid quarterly | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2.5% of the principal amount | ' | ' | ' | ' |
Percentage of principal amount repaid annually | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10% of the principal amount | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | 'LIBOR | 'alternate base rate | 'agent's prime rate | 'federal funds effective rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | 'one-month LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate added to variable rate basis(as a percent) | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | 0.50% | ' | 1.50% | 0.50% | ' | 2.25% | 1.25% | ' | ' | ' | ' | ' | ' |
Commitment fees on unused portion of the Revolving Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.30% | 0.50% | ' |
Credit agreement leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.5 | ' | ' | ' | ' | ' | ' | ' | ' |
Credit agreement interest expense ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |