Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36478 | |
Entity Registrant Name | California Resources Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-5670947 | |
Entity Address, Address Line One | 27200 Tourney Road, Suite 200 | |
Entity Address, City or Town | Santa Clarita | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91355 | |
City Area Code | 888 | |
Local Phone Number | 848-4754 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CRC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Bankruptcy Proceedings, Reporting Current | true | |
Entity Common Stock, Shares Outstanding | 83,319,721 | |
Entity Central Index Key | 0001609253 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
CURRENT ASSETS | |||
Cash | $ 122 | $ 17 | |
Trade receivables | 155 | 277 | |
Inventories | 61 | 67 | |
Other current assets, net | 82 | 130 | |
Total current assets | 420 | 491 | |
PROPERTY, PLANT AND EQUIPMENT | 22,915 | 22,889 | |
Accumulated depreciation, depletion and amortization | (18,555) | (16,537) | |
Total property, plant and equipment, net | 4,360 | 6,352 | |
OTHER ASSETS | 76 | 115 | |
TOTAL ASSETS | 4,856 | 6,958 | |
CURRENT LIABILITIES | |||
Current portion of long-term debt | 0 | 100 | |
Debtor-in-possession financing | 733 | 0 | |
Accounts payable | 221 | 296 | |
Accrued liabilities | 240 | 313 | |
Total current liabilities | 1,194 | 709 | |
LONG-TERM DEBT | 0 | 4,877 | |
DEFERRED GAIN AND ISSUANCE COSTS, NET | 0 | 146 | |
OTHER LONG-TERM LIABILITIES | 727 | 720 | |
LIABILITIES SUBJECT TO COMPROMISE | 4,516 | 0 | |
MEZZANINE EQUITY | |||
Redeemable noncontrolling interests | 692 | 802 | |
EQUITY | |||
Preferred stock (20 million shares authorized at $0.01 par value) no shares outstanding at September 30, 2020 and December 31, 2019 | 0 | 0 | |
Common stock (200 million shares authorized at $0.01 par value) outstanding shares (September 30, 2020 - 49,498,227 and December 31, 2019 - 49,175,843) | 0 | 0 | |
Additional paid-in capital | 5,148 | 5,004 | |
Accumulated deficit | (7,466) | (5,370) | |
Accumulated other comprehensive loss | (23) | (23) | |
Total equity attributable to common stock | (2,341) | (389) | |
Equity attributable to noncontrolling interests | 68 | 93 | |
Total equity | [1] | (2,273) | (296) |
TOTAL LIABILITIES AND EQUITY | $ 4,856 | $ 6,958 | |
[1] | The above tables exclude amounts related to redeemable noncontrolling interests reported in mezzanine equity. See Note 7 Joint Ventures for more information about our noncontrolling interests and a settlement agreement entered into with one of our noncontrolling interest holders in the third quarter of 2020 where the modification of terms was treated as a return from noncontrolling interest holders. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized shares (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, outstanding shares (in shares) | 0 | 0 |
Common stock, authorized shares (in shares) | 200,000,000 | 200,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, outstanding shares (in shares) | 49,498,227 | 49,175,843 |
Debtor-in-possession financing | $ 733 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUES | ||||
Oil and natural gas sales | $ 312 | $ 541 | $ 987 | $ 1,720 |
Net derivative gain (loss) from commodity contracts | 0 | 37 | 75 | (31) |
Revenue not from contract with customer | 97 | 103 | 196 | 335 |
Total revenues | 409 | 681 | 1,258 | 2,024 |
COSTS | ||||
Production costs | 141 | 221 | 460 | 684 |
General and administrative expenses | 64 | 66 | 193 | 228 |
Depreciation, depletion and amortization | 89 | 118 | 296 | 357 |
Asset impairments | 0 | 0 | 1,736 | 0 |
Taxes other than on income | 42 | 42 | 121 | 119 |
Exploration expense | 2 | 5 | 9 | 25 |
Other expenses, net | 22 | 8 | 75 | 33 |
Total costs | 422 | 533 | 3,035 | 1,697 |
OPERATING (LOSS) INCOME | (13) | 148 | (1,777) | 327 |
NON-OPERATING (LOSS) INCOME | ||||
Reorganization items, net | 66 | 0 | 66 | 0 |
Interest and debt expense, net | (28) | (95) | (200) | (293) |
Net gain on early extinguishment of debt | 0 | 82 | 5 | 108 |
Other non-operating expenses | (32) | (8) | (93) | (18) |
(LOSS) INCOME BEFORE INCOME TAXES | (7) | 127 | (1,999) | 124 |
Income tax | 0 | 0 | 0 | 0 |
NET (LOSS) INCOME | (7) | 127 | (1,999) | 124 |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||||
Mezzanine equity | (25) | (30) | (85) | (87) |
Equity | 3 | (3) | (12) | 2 |
Net income attributable to noncontrolling interests | (22) | (33) | (97) | (85) |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK | $ (29) | $ 94 | $ (2,096) | $ 39 |
Net (loss) income attributable to common stock per share | ||||
Basic (includes return from noncontrolling interest) (in dollars per share) | $ 2.20 | $ 1.89 | $ (39.64) | $ 0.78 |
Diluted (includes return from noncontrolling interest) (in dollars per share) | $ 2.20 | $ 1.89 | $ (39.64) | $ 0.77 |
Marketing and trading | ||||
REVENUES | ||||
Revenue not from contract with customer | $ 50 | $ 62 | $ 109 | $ 230 |
COSTS | ||||
Costs of sales | 35 | 45 | 67 | 170 |
Electricity sales | ||||
REVENUES | ||||
Revenue not from contract with customer | 43 | 38 | 75 | 88 |
Other revenue | ||||
REVENUES | ||||
Revenue not from contract with customer | 4 | 3 | 12 | 17 |
Electricity cost of sales | ||||
COSTS | ||||
Costs of sales | 17 | 18 | 47 | 51 |
Transportation costs | ||||
COSTS | ||||
Costs of sales | $ 10 | $ 10 | $ 31 | $ 30 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net (loss) income | $ (7) | $ 127 | $ (1,999) | $ 124 | |
Net income attributable to noncontrolling interests | (22) | (33) | (97) | (85) | |
Other comprehensive income: | |||||
Reclassification of realized losses on pension and postretirement benefits to income | [1] | 0 | 0 | 0 | 1 |
Comprehensive (loss) income attributable to common stock | $ (29) | $ 94 | $ (2,096) | $ 40 | |
[1] | No associated tax for the three and nine months ended September 30, 2020 and 2019. See Note 11 Pension and Postretirement Benefit Plans for additional information. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Tax | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to Common Stock | Equity Attributable to Noncontrolling Interests | ||||
Beginning balance at Dec. 31, 2018 | $ (247) | $ 4,987 | $ (5,342) | $ (6) | $ (361) | $ 114 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 37 | 39 | 39 | (2) | ||||||
Contributions from noncontrolling interest holders, net | 49 | 49 | ||||||||
Distributions to noncontrolling interest holders | (61) | (61) | ||||||||
Other comprehensive income | 1 | 1 | 1 | |||||||
Warrant | 2 | 2 | 2 | |||||||
Share-based compensation, net | 11 | 11 | 11 | |||||||
Ending balance at Sep. 30, 2019 | (208) | 5,000 | (5,303) | (5) | (308) | 100 | ||||
Beginning balance at Jun. 30, 2019 | (279) | 4,994 | (5,397) | (5) | (408) | 129 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 97 | 94 | 94 | 3 | ||||||
Distributions to noncontrolling interest holders | (32) | (32) | ||||||||
Warrant | 2 | 2 | 2 | |||||||
Share-based compensation, net | 4 | 4 | 4 | |||||||
Ending balance at Sep. 30, 2019 | (208) | 5,000 | (5,303) | (5) | (308) | 100 | ||||
Beginning balance at Dec. 31, 2019 | [1] | (296) | 5,004 | (5,370) | (23) | (389) | 93 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (2,084) | [1] | (2,096) | [1] | (2,096) | [1] | 12 | |||
Contributions from noncontrolling interest holders, net | 0 | |||||||||
Distributions to noncontrolling interest holders | [1] | (37) | (37) | |||||||
Share-based compensation, net | 6 | 6 | 6 | |||||||
Return from noncontrolling interest holders | 138 | 138 | 138 | |||||||
Ending balance at Sep. 30, 2020 | [1] | (2,273) | 5,148 | (7,466) | (23) | (2,341) | 68 | |||
Beginning balance at Jun. 30, 2020 | [1] | (2,376) | 5,008 | (7,437) | (23) | (2,452) | 76 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (32) | [1] | (29) | [1] | (29) | [1] | (3) | |||
Distributions to noncontrolling interest holders | [1] | (5) | (5) | |||||||
Share-based compensation, net | [1] | 2 | 2 | 2 | ||||||
Return from noncontrolling interest holders | 138 | 138 | 138 | |||||||
Ending balance at Sep. 30, 2020 | [1] | $ (2,273) | $ 5,148 | $ (7,466) | $ (23) | $ (2,341) | $ 68 | |||
[1] | The above tables exclude amounts related to redeemable noncontrolling interests reported in mezzanine equity. See Note 7 Joint Ventures for more information about our noncontrolling interests and a settlement agreement entered into with one of our noncontrolling interest holders in the third quarter of 2020 where the modification of terms was treated as a return from noncontrolling interest holders. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net (loss) income | $ (1,999) | $ 124 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 296 | 357 |
Asset impairments | 1,736 | 0 |
Net derivative (gain) loss from commodity contracts | (75) | 31 |
Net proceeds from settled commodity derivatives | 105 | 68 |
Net gain on early extinguishment of debt | (5) | (108) |
Amortization of deferred gain | (39) | (54) |
Reorganization items, net (non-cash) | (125) | 0 |
Reorganization items, net (debtor-in-possession financing costs) | 25 | 0 |
Dry hole expenses | 0 | 7 |
Other non-cash charges to income, net | 69 | 60 |
Changes in operating assets and liabilities, net | 153 | 55 |
Net cash provided by operating activities | 141 | 540 |
CASH FLOW FROM INVESTING ACTIVITIES | ||
Capital investments | (37) | (393) |
Decreases in accrued capital investments | (25) | (49) |
Asset divestitures | 41 | 164 |
Acquisitions | 0 | (6) |
Other | (7) | (7) |
Net cash used in investing activities | (28) | (291) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Proceeds from 2014 Revolving Credit Facility | 797 | 1,749 |
Repayments of 2014 Revolving Credit Facility | (1,315) | (1,776) |
Proceeds from debtor-in-possession facilities | 782 | 0 |
Repayments of debtor-in-possession facilities | (49) | 0 |
Debtor-in-possession financing costs | (25) | 0 |
Debt repurchases | (3) | (149) |
Debt transaction costs | 0 | (2) |
2020 Senior Notes payment | (100) | 0 |
Contributions from noncontrolling interest holders, net | 1 | 49 |
Distributions paid to noncontrolling interest holders | (95) | (115) |
Issuance of common stock | 0 | 3 |
Shares cancelled for taxes | (1) | (3) |
Net cash used in financing activities | (8) | (244) |
Increase in cash | 105 | 5 |
Cash—beginning of period | 17 | 17 |
Cash—end of period | $ 122 | $ 22 |
CHAPTER 11 PROCEEDINGS
CHAPTER 11 PROCEEDINGS | 9 Months Ended |
Sep. 30, 2020 | |
Plan of Reorganization [Abstract] | |
CHAPTER 11 PROCEEDINGS | CHAPTER 11 PROCEEDINGS Except when the context otherwise requires or where otherwise indicated, all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries. Our spin–off from Occidental Petroleum Corporation (Occidental) on November 30, 2014 burdened us with significant debt which was used to pay a $6.0 billion cash dividend to Occidental. Together with the activity level and payables that we assumed from Occidental and due to Occidental's retention of the vast majority of our receivables, our debt peaked at approximately $6.8 billion in May 2015. Since then, we have engaged in a series of asset sales, joint ventures, debt exchanges, tenders, debt repurchases and other financing transactions to reduce our overall level of debt and improve our balance sheet prior to filing for bankruptcy. As of September 30, 2020, we had outstanding net long-term debt of approximately $5.1 billion, of which $4.4 billion is presented as liabilities subject to compromise on our condensed consolidated balance sheet. On July 15, 2020, we filed voluntary petitions for relief under Chapter 11 of Title 11 of the Bankruptcy Code (Chapter 11 Cases) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (Bankruptcy Court). The Chapter 11 Cases were jointly administered under the caption In re California Resources Corporation, et al. , Case No. 20-33568 (DRJ). We filed with the Bankruptcy Court, on July 24, 2020, the Debtors’ Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and, on October 8, 2020, the Amended Debtors’ Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (as amended, supplemented or modified, the Plan ). On October 13, 2020, the Bankruptcy Court confirmed the Plan, which was conditioned on certain items such as obtaining exit financing. The conditions to effectiveness of the Plan were satisfied and we emerged from Chapter 11 on October 27, 2020 (Effective Date). During the course of the Chapter 11 Cases, the Bankruptcy Court granted the relief requested in certain motions, authorizing payments of pre-petition liabilities with respect to certain employee compensation and benefits, taxes, royalties, certain essential vendor payments and insurance and surety obligations, which allowed our business operations to continue uninterrupted during the pendency of the Chapter 11 Cases. All transactions outside the ordinary course of business required the prior approval of the Bankruptcy Court. On July 15, 2020, immediately prior to the commencement of the Chapter 11 Cases, we and certain affiliates of Ares Management L.P. (Ares), including ECR Corporate Holdings L.P., a portfolio company of Ares (ECR), entered into a Settlement and Assumption Agreement (Settlement Agreement) related to our midstream joint venture, Elk Hills Power, LLC (Ares JV or Elk Hills Power), which holds our Elk Hills power plant and a cryogenic gas processing plant. On August 25, 2020, the Bankruptcy Court entered an order approving the Settlement Agreement on a final basis. Among other things, the Settlement Agreement included a conversion right, which would be deemed exercised upon our emergence from bankruptcy, allowing us to acquire all (but not less than all) of the equity interests in the Ares JV held by ECR in exchange for secured notes (EHP Notes), approximately 20.8% of our new common stock (Ares Settlement Stock) and $2.5 million in cash. For more information on the Settlement Agreement, see Note 7 Joint Ventures. The commencement of the Chapter 11 Cases constituted an event of default that accelerated our obligations under the following agreements: (i) Credit Agreement, dated as of September 24, 2014, among JPMorgan Chase Bank, N.A., as administrative agent, and the lenders that are party thereto (2014 Revolving Credit Facility), (ii) Credit Agreement, dated as of August 12, 2016, among The Bank of New York Mellon Trust Company, N.A., as collateral and administrative agent, and the lenders that are party thereto (2016 Credit Agreement), (iii) Credit Agreement, dated as of November 17, 2017, among The Bank of New York Mellon Trust Company, N.A., as administrative agent, and the lenders that are party thereto (2017 Credit Agreement), and (iv) the indentures governing our 8% Senior Secured Second Lien Notes due 2022 (Second Lien Notes), 5.5% Senior Notes due 2021 (2021 Notes) and 6% Senior Notes due 2024 (2024 Notes and together with the 5% Senior Notes due 2020 and 2021 Notes, the Senior Notes). Additionally, other events of default, including cross-defaults, are present under these debt agreements. Under the Bankruptcy Code, the creditors under these debt agreements were stayed from taking any action against us, including exercising remedies as a result of any event of default. See Note 6 Debt for additional details about our debt. Joint Plan of Reorganization Under Chapter 11 Pursuant to the Plan, the following transactions occurred on the Effective Date: • We issued an aggregate of 83.3 million shares of new common stock and reserved 4.4 million shares for issuance upon exercise of the warrants described below; • We acquired all of the member interests in the Ares JV held by ECR in exchange for the EHP Notes, 17.3 million shares of new common stock and $2.5 million in cash (see Note 6 Debt and Note 7 Joint Ventures for additional information); • Holders of secured claims under the 2017 Credit Agreement received 22.7 million shares of new common stock in exchange for those claims, and holders of deficiency claims under the 2017 Credit Agreement and all outstanding obligations under the 2016 Credit Agreement, Second Lien Notes, 2021 Notes and 2024 Notes received 4.4 million shares of new common stock in exchange for those claims; • In connection with the Subscription Rights offering and Backstop Commitment Agreement, 34.6 million shares of new common stock were issued in exchange for $446 million (net of a $4 million fee), the proceeds of which were used to pay down our debtor-in-possession financing; • Our Subscription Rights offering was backstopped by certain creditors who received 3.5 million shares of new common stock as a backstop commitment premium (refer to Note 16 Equity for additional information on the backstop commitment premium); • The holders of Unsecured Debt Claims (as defined in the Plan) under the 2016 Credit Agreement, Second Lien Notes, 2021 Notes and 2024 Notes received Tier 1 Warrants and Tier 2 Warrants (each as defined in the Plan and collectively, Warrants) to purchase up to 2% and 3%, respectively, of our outstanding shares (on a fully diluted basis calculated immediately after the Effective Date), with an initial exercise price of $36.00 per share, which expire on October 27, 2024 and have customary anti-dilution protections (refer to Note 16 Equity for additional information on the Warrants); • All other general unsecured claims will be paid or disputed in the ordinary course of business; and • All existing equity interests were cancelled and their holders received no distributions. As a condition to our emergence, we repaid the outstanding balance of our debtor-in-possession financing with proceeds from our Subscription Rights offering, Backstop Commitment Agreement and a new senior secured revolving credit facility led by Citibank, N.A. We also issued approximately 821,000 shares of new common stock for a debtor-in-possession exit fee. For more information on our debtor-in-possession credit agreements and our post-emergence indebtedness, see Note 6 Debt . One of the conditions of the Plan was to establish a new Board of Directors, which occurred on October 27, 2020. Changes to our Stock-Based Compensation Programs As a result of our bankruptcy, the outstanding stock-based awards under our Amended and Restated California Resources Corporation Long-Term Incentive Plan were cancelled on our Effective Date. Any new stock-based awards or compensation plans will be reviewed and approved by our Board of Directors, which includes seven new directors appointed on October 27, 2020. The cancellation of these stock-based compensation awards resulted in the recognition of all previously unrecognized compensation expense for equity-settled awards and the liability related to our cash-settled awards was eliminated as the participants received no consideration. The net effect of these adjustments was not material to our financial statements. Changes to the 2020 Compensation Programs in Second Quarter 2020 In the second quarter of 2020, resulting from the unprecedented circumstances affecting the industry and market volatility, we reviewed our incentive programs for the entire workforce to determine whether those programs appropriately aligned compensation opportunities with our 2020 goals and ensured the stability of our workforce. Following this review, effective May 19, 2020, our then Board of Directors approved changes in the variable compensation programs for all participating employees. The previously established target amounts of 2020 variable compensation programs did not change; however, all amounts that vest are being settled in cash. As a condition to receiving any award, participants waived participation in our 2020 annual incentive program and forfeited all stock-based compensation awards previously granted in 2020. At that time, there were no changes to stock-based compensation awards granted prior to February 2020; however, these pre-2020 awards were subsequently cancelled as part of the Plan. Changes to the variable compensation programs had the effect of accelerating the associated payments into 2020 from future periods. However, the total amount of compensation to be paid under the variable compensation programs at target for 2020 remained largely the same as the amounts that would have been paid at target prior to the changes. Our future compensation programs will be determined by our new Board of Directors. Organizational Changes During the course of the Chapter 11 Cases, we evaluated the structure of our workforce and, in August 2020, we implemented organizational changes that resulted in a reduction of our headcount from 1,250 to approximately 1,100 employees. We believe the steps taken improved and strengthened our business as we emerge from bankruptcy. We recorded a one-time $10 million restructuring charge in the third quarter of 2020. We will continue to evaluate resource levels depending on commodity prices. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We are an independent oil and natural gas exploration and production company operating properties exclusively within California. We were incorporated in Delaware and became a publicly traded company on December 1, 2014. We have applied Financial Accounting Standards Board Accounting Standards Codification 852, Reorganizations (ASC 852), in preparing these unaudited condensed consolidated financial statements. ASC 852 requires that the financial statements, for periods subsequent to the petition date (July 15, 2020), distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. As a result, we have segregated liabilities and obligations whose treatment and satisfaction are dependent on the outcome of the Chapter 11 Cases and classified these items as liabilities subject to compromise (LSTC) on our condensed consolidated balance sheet as of September 30, 2020. In addition, we have classified all income, expenses, gains or losses that were incurred or realized as a result of the Chapter 11 Cases subsequent to the petition date as reorganization items, net in our condensed consolidated statements of operations for the period ended September 30, 2020. Fresh Start Accounting We believe that we are required to adopt fresh start accounting upon emergence from bankruptcy because (1) the holders of existing voting shares prior to emergence received less than 50% of our new voting shares following our emergence from bankruptcy and (2) the reorganization value of our assets immediately prior to the confirmation of the Plan was less than the post-petition liabilities and allowed claims, which are included in LSTC. Fresh start accounting will be applied as of October 27, 2020, the date we emerged from bankruptcy. Under the principles of fresh start accounting, a new reporting entity is considered to have been created, and, as a result, the reorganization value of the emerging entity is assigned to individual assets and liabilities based on their estimated relative fair values. The process of estimating the fair value of our assets, liabilities and equity upon emergence is currently ongoing. In support of the Plan, the enterprise value of the successor company was estimated and approved by the Bankruptcy Court to be in the range of $2.2 billion to $2.8 billion. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the financial statements of the successor entity will not be comparable to the financial statements, including this statement, prepared prior to our Effective Date. Liabilities Subject to Compromise – Pre-petition Debt LSTC include our long-term debt and related accrued interest up to the petition date, which represents all of the known or potential obligations resolved in connection with our Plan. Contractual interest on these obligations through September 30, 2020 was $289 million, of which $72 million was not recognized in our financial statements. Upon emergence, all general unsecured claims, other than debt, will be paid or disputed in the ordinary course of business pursuant to the Plan. As of September 30, 2020, LSTC on our condensed consolidated balance sheet included the following: September 30, 2020 (in millions) Long-term debt (principal amount): 2017 Credit Agreement $ 1,300 2016 Credit Agreement 1,000 Second Lien Notes 1,808 5.5% Senior Notes due 2021 100 6% Senior Notes due 2024 144 Accrued interest on long-term debt 164 Total liabilities subject to compromise $ 4,516 Reorganization Items Related to our Chapter 11 Cases Reorganization items, net represent the one-time costs related to our reorganization, including the non-cash write-off of unamortized deferred gain, original issue discounts and deferred issuance costs associated with our long-term debt impacted by the Chapter 11 Cases. Legal, professional and other fees incurred subsequent to our petition date through September 30, 2020, including success-based fees, are also included in reorganization items, net as these fees were incurred as a result of the restructuring process. Reorganization items, net consisted of the following for the three and nine months ended September 30, 2020 (in millions): Unamortized deferred gain and issuance costs, net (a) $ 125 Legal, professional and other, net (b) (34) Debtor-in-possession financing costs (25) Total reorganization items, net $ 66 (a) Reflects non-cash adjustments necessary to the carrying amount of our long-term debt to state such amounts at face value. (b) Includes $27 million of unpaid items included in changes in operating assets and liabilities, net on our condensed consolidated statement of cash flows at September 30, 2020. In the opinion of our management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2020 and December 31, 2019 and the statements of operations, comprehensive income (loss), equity and cash flows for the three and nine months ended September 30, 2020 and 2019, as applicable. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and natural gas exploration and development 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 our condensed consolidated balance sheets, statements of operations, equity and cash flows. |
ACCOUNTING AND DISCLOSURE CHANG
ACCOUNTING AND DISCLOSURE CHANGES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
ACCOUNTING AND DISCLOSURE CHANGES | ACCOUNTING AND DISCLOSURE CHANGES Recently Adopted Accounting and Disclosure Changes We adopted the FASB's new rules on current expected credit losses on January 1, 2020, using a modified retrospective approach to the first period in which the guidance is effective. The new rules change the measurement of credit losses for financial assets and certain other instruments, including trade and other receivables with a right to receive cash, and require the use of a new forward-looking expected loss model that will result in the earlier recognition of an allowance for losses. The adoption of these new rules did not have a significant impact to our condensed consolidated financial statements. These rules apply to our trade receivables and joint interest billings to third-party customers. Credit exposure for each customer is monitored for outstanding balances and current activity. We actively manage our credit risk by selecting counterparties that we believe to be financially sound and continue to monitor their financial health. Concentration of credit risk is regularly reviewed to ensure that counterparty credit risk is adequately diversified. We believe exposure to counterparty credit-related losses at September 30, 2020 was not material and losses associated with counterparty credit risk have been insignificant for all periods presented. |
OTHER INFORMATION
OTHER INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
OTHER INFORMATION | |
OTHER INFORMATION | OTHER INFORMATION Restricted cash — Cash at September 30, 2020 included $24 million which was restricted under agreements to fund operating expenses at one of our joint ventures and for distributions to a joint venture (JV) partner. Cash at December 31, 2019 included $3 million, which was restricted for distributions to a JV partner. Other current assets, net — Other current assets, net as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, December 31, 2020 2019 (in millions) Amounts due from joint interest partners, net (a) $ 41 $ 70 Derivative assets 17 39 Prepaid expenses 24 19 Other — 2 Other current assets, net $ 82 $ 130 (a) Both September 30, 2020 and December 31, 2019 balances included a $19 million allowance for credit losses against amounts due from joint interest partners. Accrued liabilities — Accrued liabilities as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, December 31, 2020 2019 (in millions) Accrued employee-related costs (a) $ 81 $ 116 Accrued taxes other than on income 64 57 Accrued interest 1 13 Lease liability 11 28 Asset retirement obligations 28 28 Other (b) 55 71 Accrued liabilities $ 240 $ 313 (a) Accrued employee-related costs declined $35 million primarily due to incentive, retention, and severance payments made to employees and former employees. (b) Other accrued liabilities declined $16 million primarily due to payments to joint interest partners and legal settlement payments. These decreases were partially offset by an increase in accrued legal and professional fees. Other long-term liabilities — Other long-term liabilities included asset retirement obligations of $507 million and $489 million at September 30, 2020 and December 31, 2019, respectively. The remainder of the balance for each year consisted primarily of postretirement and pension benefit obligations, liabilities related to deferred compensation arrangements and lease liabilities. Supplemental Cash Flow Information We did not make U.S. federal and state income tax payments during the nine months ended September 30, 2020 and 2019. Interest paid, net of capitalized amounts, totaled $72 million and $290 million for the nine months ended September 30, 2020 and 2019, respectively. Cash paid for legal and professional fees, which is included in reorganization items, net on our condensed consolidated statement of operations for the nine months ended September 30, 2020, totaled $7 million. Non-cash financing activities in 2020 included a $138 million downward adjustment to mezzanine equity related to a Settlement Agreement with one of our joint venture partners. See Note 7 Joint Ventures for more on the Settlement Agreement. Fair Value of Financial Instruments The carrying amounts of cash and other on-balance sheet financial instruments, other than debt, approximate fair value. Refer to Note 6 Debt for the fair value of our debt. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventory is valued at the lower of cost and net realizable value. Finished goods predominantly comprise oil and natural gas liquids (NGLs). Inventories as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, December 31, 2020 2019 (in millions) Materials and supplies $ 58 $ 64 Finished goods 3 3 Total $ 61 $ 67 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Pre-Emergence Indebtedness As of September 30, 2020 and December 31, 2019, our short-term debtor-in-possession (DIP) financing and current portion of long-term debt consisted of the following: Outstanding Principal Interest Rate Security September 30, 2020 December 31, 2019 ($ in millions) Senior DIP Facility $ 83 $ — LIBOR plus 4.5% ABR plus 3.5% Secured Superpriority Junior DIP Facility 650 — LIBOR plus 9.0% ABR plus 8.0% Secured Superpriority Current portion of long-term debt — 100 Total short-term borrowings and current maturities $ 733 $ 100 As of September 30, 2020 and December 31, 2019, our long-term debt consisted of the following credit agreements, Second Lien Notes and Senior Notes: Outstanding Principal Interest Rate Security September 30, 2020 December 31, 2019 ($ in millions) Credit Agreements 2014 Revolving Credit Facility (a) — 518 LIBOR plus 3.25%-4.00% ABR plus 2.25%-3.00% Shared First-Priority Lien 2017 Credit Agreement 1,300 1,300 LIBOR plus 4.75% ABR plus 3.75% Shared First-Priority Lien 2016 Credit Agreement 1,000 1,000 LIBOR plus 10.375% ABR plus 9.375% First-Priority Lien Second Lien Notes Second Lien Notes 1,808 1,815 8% Second-Priority Lien Senior Notes 5% Senior Notes due 2020 — 100 5% Unsecured 5.5% Senior Notes due 2021 100 100 5.5% Unsecured 6% Senior Notes due 2024 144 144 6% Unsecured Outstanding long-term debt $ 4,352 $ 4,977 Less: Current portion of long-term debt — (100) Less: Amounts reclassified to LSTC (4,352) — Total long-term debt $ — $ 4,877 Note: For a detailed description of our credit agreements, Second Lien Notes and Senior Notes, please see our most recent Form 10-K for the year ended December 31, 2019. (a) The proceeds from our debtor-in-possession credit agreements were used to repay the balance of our 2014 Revolving Credit Facility. Borrowings under our debtor-in-possession credit agreements are classified as a current liability on our condensed consolidated balance sheet at September 30, 2020. As of September 30, 2020, we had letters of credit outstanding of $151 million under the Senior DIP Facility. As of December 31, 2019, we had letters of credit outstanding under the 2014 Revolving Credit Facility of $165 million. These letters of credit were issued to support ordinary course marketing, insurance, regulatory and other items. Related to the Chapter 11 Cases, we recorded a non-cash gain of $125 million to write off all of the related unamortized deferred gain, discount and debt issuance costs as a reorganization item, net in our condensed consolidated statements of operations for the three and nine months ended September 30, 2020. As of December 31, 2019, net deferred gain and issuance costs were $146 million, consisting of deferred gain and issuance costs of $211 million and $65 million, respectively. Note Repurchases In the first quarter of 2020, we repurchased $7 million in face value of our Second Lien Notes for $3 million in cash resulting in a pre-tax gain of $5 million, including the effect of unamortized deferred gain and issuance costs. We did not repurchase any notes in the second or third quarters of 2020. In the nine months ended September 30, 2019, we repurchased approximately $229 million in face value of our Second Lien Notes for $149 million in cash resulting in a pre-tax gain of $108 million, including the effect of unamortized deferred gain and issuance costs. Missed Interest Payments and Forbearance On May 15, 2020, we did not make an interest payment of approximately $4 million on our 2024 Notes. The indenture governing the 2024 Notes provides for a 30-day grace period and the payment was made on June 12, 2020. On May 29, 2020, we did not pay approximately $51 million in the aggregate of interest due under our 2017 Credit Agreement and 2016 Credit Agreement. Our failure to make those interest payments constituted events of default under the 2017 Credit Agreement, 2016 Credit Agreement and, as a result of cross default, under the 2014 Revolving Credit Facility. On June 2, 2020, we entered into forbearance agreements (Forbearance Agreements) with (i) certain lenders of a majority of the outstanding principal amount of the loans under the 2014 Revolving Credit Facility, (ii) certain lenders of a majority of the outstanding principal amount of the loans under the 2016 Credit Agreement, and (iii) certain lenders of a majority of the outstanding principal amount of the loans under the 2017 Credit Agreement. Pursuant to the Forbearance Agreements, the lenders who were parties to the Forbearance Agreements agreed to forbear from exercising any remedies under the 2014 Revolving Credit Facility, 2016 Credit Agreement and 2017 Credit Agreement with respect to our failure to make the aforementioned interest payments, initially through June 14, 2020 and subsequently through July 15, 2020. On June 15, 2020, we did not make an interest payment of approximately $72 million on our Second Lien Notes. The indenture governing the Second Lien Notes provides for a 30-day grace period, which expired on July 15, 2020. We did not make the July 15, 2020 interest payment and commenced bankruptcy proceedings. Commencement of Bankruptcy Proceedings The commencement of a voluntary proceeding in bankruptcy constituted an immediate event of default under the 2014 Revolving Credit Facility, 2016 Credit Agreement, 2017 Credit Agreement, and the indentures governing the Second Lien Notes, 2021 Notes and 2024 Notes, resulting in the automatic and immediate acceleration of all of our outstanding pre-petition long-term debt. Any efforts to enforce payment obligations related to the acceleration of our long-term debt were automatically stayed by the commencement of the Chapter 11 Cases, and the creditors’ rights of enforcement were subject to the applicable provisions of the Bankruptcy Code. See Note 1 Chapter 11 Proceedings for more information on our Chapter 11 Cases. Pursuant to the Plan, on the Effective Date, the obligations of the Debtors under each of the following debt instruments were cancelled and the applicable agreements governing such obligations were terminated: (a) the Credit Agreement, dated as of November 17, 2017, among The Bank of New York Mellon Trust Company, N.A., as administrative agent, as amended, restated, supplemented or otherwise modified (the “2017 Term Loan Agreement”); (b) the Credit Agreement, dated as of August 12, 2016, among The Bank of New York Mellon Trust Company, N.A., as administrative agent and collateral agent, as amended, restated, supplemented or otherwise modified (the “2016 Term Loan Agreement”); (c) the Indenture dated as of December 15, 2015, among The Bank of New York Mellon Trust Company, N.A., as trustee, pursuant to which the 8% Senior Secured Second Lien Notes due 2022 were issued, as amended, supplemented or otherwise modified (the “Second Lien Notes Indenture”); and (d) the Indenture dated as of October 1, 2014, among Wilmington Trust, National Association, as successor to Wells Fargo Bank, National Association, as trustee, pursuant to which the 5% Senior Notes due 2020, 5.5% Senior Notes due 2021 and 6% Senior Notes due 2024 were issued, as amended, supplemented or otherwise modified (the “Unsecured Notes Indenture”). Debtor-in-Possession Credit Agreements On July 23, 2020, we entered into a Senior Secured Superpriority DIP Credit Agreement with JP Morgan, as administrative agent, and certain other lenders (Senior DIP Credit Agreement), which provided for the senior DIP facility in an aggregate principal amount of up to $483 million (Senior DIP Facility). The Senior DIP Facility included a $250 million revolving facility which was primarily used by us to (i) fund working capital needs, capital expenditures and additional letters of credit during the pendency of the Chapter 11 Cases and (ii) pay certain costs, fees and expenses related to the Chapter 11 Cases and the Senior DIP Facility. Following a hearing, the Bankruptcy Court entered a final order on August 14, 2020, which approved the Senior DIP Facility on a final basis. The Senior DIP Facility also included (i) a $150 million letter of credit facility which was used to redeem letters of credit outstanding under the 2014 Revolving Credit Facility as issued under the Senior DIP Facility, and (ii) $83 million of term loan borrowings which were used to repay a portion of the 2014 Revolving Credit Facility. The Senior DIP Facility allowed for the issuance of an additional $35 million of letters of credit. On July 23, 2020, we entered into a Junior Secured Superpriority DIP Credit Agreement with Alter Domus, as administrative agent, and certain lenders (Junior DIP Credit Agreement), which provided for a junior DIP facility in an aggregate principal amount of $650 million (Junior DIP Facility and together with the Senior DIP Facility, the DIP Facilities). The proceeds of the Junior DIP Facility were used to (i) refinance in full all remaining obligations under the 2014 Revolving Credit Facility and (ii) pay certain costs, fees and expenses related to the Chapter 11 Cases and the Junior DIP Facility. The Senior DIP Credit Agreement and Junior DIP Credit Agreement both contain representations, warranties, and covenants that are customary for DIP facilities of their type, including certain milestones applicable to the Chapter 11 Cases, compliance with an agreed budget, hedging on not less than 25% of our share of expected crude oil production for a specified period, and other customary limitations on additional indebtedness, liens, asset dispositions, investments, restricted payments and other negative covenants, in each case subject to exceptions. Additionally, the Senior DIP Credit Agreement and Junior DIP Credit Agreement require us to maintain (i) minimum liquidity over a rolling four-week period of not less than $50 million, and (ii) minimum liquidity at all times of not less than $35 million. The Senior DIP Credit Agreement and Junior DIP Credit Agreement also contain customary events of default for facilities of their type, including failure to achieve the milestones and the occurrence of certain events in the Chapter 11 Cases, which would constitute an event of default. If an event of default occurs or is continuing, the applicable administrative agent may accelerate repayment of the indebtedness outstanding and/or pursue other remedies authorized under the Senior DIP Facility or the Junior DIP Facility. Borrowings under the Senior DIP Facility bear interest at the London interbank offered rate (LIBOR) plus 4.5% for LIBOR loans and the alternative base rate (ABR) plus 3.5% for alternative base rate loans. We also agreed to pay an upfront fee equal to 1.0% on the commitment amount of the Senior DIP Facility and quarterly commitment fees of 0.5% on the undrawn portion of the Senior DIP Facility. Borrowings under the Junior DIP Facility bear interest at a rate of LIBOR plus 9.0% for LIBOR loans and ABR plus 8.0% for alternate base rate loans. We also agreed to pay an upfront fee equal to 1.0% of the commitment amount funded on the closing date and a fronting fee to a fronting lender. Certain of our subsidiaries, including each of the debtors in the Chapter 11 Cases, have guaranteed all obligations under the Senior DIP Credit Agreement and Junior DIP Credit Agreement. To secure the obligations under the Senior DIP Credit Agreement and Junior DIP Credit Agreement, we have granted liens on substantially all of our assets, whether now owned or hereafter acquired. The Senior DIP Facility was repaid in full and terminated on the Effective Date using proceeds borrowed under our new Revolving Credit Facility discussed below. The Junior DIP Facility was also repaid in full and terminated on the Effective Date using (i) $200 million from the Second Lien Term Loan discussed below and (ii) $450 million from the subscription rights offering discussed in Note 1 Chapter 11 Proceedings . Post-Emergence Indebtedness Revolving Credit Facility On October 27, 2020, we entered into a Credit Agreement with Citibank, N.A., as administrative agent, and certain other lenders. This credit agreement currently consists of a $540 million senior revolving loan facility (Revolving Credit Facility), which we are permitted to increase if we obtain additional commitments from new or existing lenders. Our Revolving Credit Facility also includes a sub-limit of $200 million for the issuance of letters of credit. The revolving commitments are subject to an automatic reduction if certain conditions are not met by April 2021. On the Effective Date, we borrowed $225 million under the Revolving Credit Facility to refinance our DIP Facilities, replace our existing letters of credit and pay certain costs, fees and expenses related to the other transactions consummated on the Effective Date. Our initial borrowings included $118 million used to cash collateralize on an interim basis certain letters of credit that were outstanding under our Senior DIP Facility. We expect that these letters of credit will be transitioned into our new Revolving Credit Facility and will no longer be cash collateralized. In addition, we had unrestricted cash of $72 million on the Effective Date. The proceeds of all or a portion of the Revolving Credit Facility may be used for our working capital needs and for other purposes subject to meeting certain criteria. Security – The lenders have a first-priority lien on a substantial majority of our assets, except assets securing the EHP Notes as discussed below. Interest Rate – We can elect to borrow at either an adjusted LIBOR rate or an ABR rate, subject to a 1% floor and 2% floor, respectively, plus an applicable margin. The ABR is equal to the highest of (i) the federal funds effective rate plus 0.50%, (ii) the administrative agent prime rate and (iii) the one-month adjusted LIBOR rate plus 1%. The applicable margin is adjusted based on the borrowing base utilization percentage and will vary from (i) in the case of LIBOR loans, 3% to 4% and (ii) in the case of ABR loans, 2% to 3%; provided that in the event that the EHP Notes are not paid in full on or prior to December 31, 2021, the applicable margin will be increased by 0.25% effective as of January 1, 2022 and will be increased by an additional 0.25% at the beginning of each subsequent fiscal quarter until such date on which the EHP Notes are paid in full. The unused portion of the facility is subject to a commitment fee of 0.5% per annum. We also pay customary fees and expenses. Interest on ABR loans is payable quarterly in arrears. Interest on LIBOR loans is payable at the end of each LIBOR period, but not less than quarterly. Maturity Date – Our Revolving Credit Facility matures 42 months after closing. Amortization Payments – The Revolving Credit Facility does not include any obligation to make amortizing payments. Borrowing Base – The borrowing base, currently $1.2 billion, will be redetermined semi-annually in April and October. Financial Covenants – Our Revolving Credit Facility includes the following financial covenants: Ratio Components Required Levels Tested Consolidated Total Net Leverage Ratio Ratio of consolidated total secured debt to consolidated EBITDAX (a) Not greater than 3.00 to 1.00 (c) Quarterly Current Ratio Ratio of consolidated current assets to consolidated current liabilities (b) Not less than 1.00 to 1.00 Quarterly (a) EBITDAX is calculated as defined in the credit agreement. (b) The available credit under our Revolving Credit Facility is included in consolidated current assets as part of the calculation of the current ratio. (c) In the event that the EHP Notes are not paid in full prior to December 31, 2021 (and until the EHP Notes are repaid in full), the Consolidated Total Net Leverage Ratio for the Test Period ending on December 31, 2021 and as of the last day of any Test Period ending thereafter may not exceed 2.50 to 1.00. Liquidity – We will become subject to a monthly minimum liquidity requirement of $200 million if, as of the date of our scheduled spring 2021 borrowing base redetermination, (a) our liquidity is less than $290 million and (b) we are not able to obtain at least $60 million in additional commitments under our Revolving Credit Facility or through capital markets or other junior financing transactions, for so long as the conditions in (a) and (b) remain unmet. Other Covenants – Our Revolving Credit Facility includes covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, make asset sales and investments, repay existing indebtedness, make subsidiary distributions and enter into transactions that would result in fundamental changes. We are also restricted in the amount of cash dividends we can pay on our common stock unless we meet certain covenants included in the credit agreement. Our Revolving Credit Facility also requires us to maintain hedges on a minimum amount of crude oil production, determined semi-annually, of no less than (i) 75% of our reasonably anticipated oil production from our proved reserves for the first 24 months after the closing of the Revolving Credit Facility, which occurred on the Effective Date, and (ii) 50% of our reasonably anticipated oil production from our proved reserves for a period from the 25th month through the 36th month after the same date. The Revolving Credit Facility specifies the forms of hedges and prices (which can be prevailing prices) that must be used. In addition, for the first 24 months after closing an additional 25% of production from proved reserves needs to be hedged, which may take any form. We must also maintain acceptable commodity hedges for no less than 50% of the reasonably anticipated oil production from our proved reserves for at least 24 months following the date of delivery of each reserve report. We may not hedge more than 80% of reasonably anticipated total forecasted production of crude oil, natural gas and natural gas liquids from our oil and gas properties for a 48-month period following the date of entry into any commodity hedging contract. Events of Default and Change of Control – Our Revolving Credit Facility provides for certain events of default, including upon a change of control, as defined in the credit agreement, that entitles our lenders to declare the outstanding loans immediately due and payable, subject to certain limitations and conditions. Second Lien Term Loan On October 27, 2020, we entered into a $200 million credit agreement with Alter Domus Products Corp., as administrative agent, and certain other lenders (Second Lien Term Loan). The proceeds were used to refinance our Junior DIP Facility and to pay certain costs, fees and expenses related to the other transactions consummated on the Effective Date. Security – The lenders have a second-priority lien (junior to the Revolving Credit Facility) on a substantial majority of our assets, except assets securing the EHP Notes as discussed below. Interest Rate – We can elect to pay interest at either an adjusted LIBOR rate or ABR rate, subject to a 1% floor and 2% floor, respectively, plus an applicable margin. The ABR rate is equal to the highest of (i) the prime rate, (ii) the federal funds rate effective rate plus 0.5%, and (iii) the one-month adjusted LIBOR rate plus 1%. In the case of an adjusted LIBOR rate election, the applicable margin is 9% per annum if interest is paid in cash and 10.5% per annum if interest is paid-in-kind. Prior to the second anniversary of the closing date of the Second Lien Term Loan, the applicable margin in the case of an ABR rate election is 8% per annum if paid in cash and 9.5% per annum if paid-in-kind, and the applicable margin in the case of an adjusted LIBOR rate election is 9% if paid in cash and 10.5% if paid-in-kind. After the second anniversary of the closing date, the applicable margin is 8% with respect to any ABR loan and 9% with respect to an adjusted LIBOR loan. Interest on ABR loans is paid quarterly in arrears and interest based on the adjusted LIBOR rate is due at the end of each LIBOR period, which can be one, two, three or six months but not less than quarterly. We also pay customary fees and expenses. Maturity Date – Our Second Lien Term Loan matures five years after the closing date, subject to extension. Amortization Payments – We are required to make scheduled amortization payments only with respect to extended loans, the terms of such extension to be agreed with the extending lender at the time of such extension. Repurchases – We are permitted to repurchase our Second Lien Term Loan in open market purchases or tender offers on a non-pro rata basis. Redemption – We may redeem all or part of our Second Lien Term Loan, at any time prior to the maturity date, at redemption price equal to (i) 100% of the principal amount if redeemed prior to 90 days after closing, (ii) 105% of the principal amount if redeemed after 90 days and before the first anniversary date, (iii) 103% of the principal amount if redeemed on or after the first anniversary date and before the second anniversary date, (iv) 102% of the principal amount if redeemed on or after the second anniversary date and before the third anniversary date, (v) 101% of the principal amount if redeemed on or after the third anniversary date and before the fourth anniversary date, and (vi) at 100% of the principal amount if redeemed in the fifth year. Financial Covenants – Our Second Lien Term Loan includes the following financial covenants: Ratio Components Required Levels Tested Consolidated Total Net Leverage Ratio Ratio of consolidated total debt to consolidated EBITDAX (a) Not greater than 3.45 to 1.00 (c) Quarterly Current Ratio Ratio of consolidated current assets to consolidated current liabilities (b) Not less than 0.85 to 1.00 Quarterly (a) EBITDAX is calculated as defined in the credit agreement. (b) The available credit under our Revolving Credit Facility is included in consolidated current assets as part of the calculation of the current ratio. (c) In the event that the EHP Notes are not paid in full prior to December 31, 2021 (and until the EHP Notes are repaid in full), the Consolidated Total Net Leverage Ratio for the Test Period ending on December 31, 2021 and as of the last day of any Test Period ending thereafter may not exceed 2.875 to 1.00. Liquidity – We will become subject to a monthly minimum liquidity requirement of $170 million if, as of the Spring 2021 Scheduled Redetermination (as defined in the Revolving Credit Facility), (a) our liquidity is less than $247 million and (b) we are not able to obtain at least $51 million in additional commitments under our Revolving Credit Facility or through capital markets or other junior financing transactions, for so long as the conditions in (a) and (b) remain unmet. Other Covenants – Our Second Lien Term Loan includes covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, make asset sales and investments, repay existing indebtedness, make subsidiary distributions and enter into transactions that would result in fundamental changes. We are also restricted in the amount of cash dividends we can pay on our common stock unless we meet certain covenants included in the credit agreement. Our Second Lien Term Loan also requires us to maintain hedges on a minimum amount of crude oil production, determined semi-annually, of no less than (i) 75% of our reasonably anticipated oil production from our proved reserves for the first 24 months after the closing of the Revolving Credit Facility, which occurred on the Effective Date, and (ii) 50% of our reasonably anticipated oil production from our proved reserves for a period from the 25th month through the 36th month after the same date. The Second Lien Term Loan specifies the forms of hedges and prices (which can be prevailing prices) that must be used. In addition, for the first 24 months after closing an additional 25% of production from proved reserves needs to be hedged, which may take any form. We must also maintain acceptable commodity hedges hedging no less than 50% of the reasonably anticipated oil production from our proved reserves for at least 24 months following the date of delivery of each reserve report. We may not hedge more than 80% of reasonably anticipated total forecasted production of crude oil, natural gas and natural gas liquids from our oil and gas properties for a 48-month period following the date of entry into any commodity hedging contract. Events of Default and Change of Control – Our Second Lien Term Loan provides for certain events of default, including upon a change of control, as defined in the credit agreement, that entitles our lenders to declare the outstanding loans immediately due and payable, subject to certain limitations and conditions. We are subject to a cross-default provision that causes a default under this facility if certain defaults occur under the Revolving Credit Facility or the EHP Notes. EHP Notes On the Effective Date, our wholly-owned subsidiary, EHP Midco Holding Company, LLC (Elk Hills Issuer) entered into a Note Purchase Agreement (Note Purchase Agreement) with certain subsidiaries of Ares and Wilmington Trust, N.A. as collateral agent. The $300 million Notes were issued as partial consideration for the Class B Preferred Units, Class A Common Units and Class C Common Units in the Ares JV previously held by ECR (EHP Notes). The EHP Notes are senior notes due in 2027, and are secured by a first-priority security interest in all of the assets of Elk Hills Power, any third-party offtake contracts for power generated by Elk Hills Power, all of the equity interests of Elk Hills Power held by Elk Hills Issuer and all of the equity interests of Elk Hills Issuer held by its direct parent, EHP Topco Holding Company, LLC, our wholly-owned subsidiary. We and Elk Hills Power have guaranteed, on a joint and several basis, all of the obligations of Elk Hills Issuer under the EHP Notes. The EHP Notes bear an interest rate of 6.0% per annum through the fourth anniversary of issuance, increasing to 7.0% per annum after the fourth anniversary of issuance and to 8.0% per annum after the fifth anniversary of issuance. The EHP Notes may be redeemed at any time prior to their maturity date without payment of premium or penalty. Fair Value At September 30, 2020, we estimated the fair value of our DIP Facilities, which are classified as Level 2 in the fair value hierarchy, to approximate their carrying value of $733 million due to their short-term maturities. Our long-term debt at September 30, 2020 was presented as LSTC and will be impaired under the Plan. As of September 30, 2020, we estimated the fair value of our long-term debt to approximate $500 million based on observable inputs in less active markets (Level 2) compared to a carrying value of $4.4 billion. The estimated fair value of our long-term debt, at December 31, 2019, based on prices from known market transactions (Level 1), was approximately $3.8 billion compared to a carrying value of $5.0 billion. |
JOINT VENTURES
JOINT VENTURES | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
JOINT VENTURES | JOINT VENTURES Noncontrolling Interests The following table presents the changes in noncontrolling interests for our consolidated JVs, prior to our emergence, which are reported in equity and mezzanine equity on the condensed consolidated balance sheets for the nine months ended September 30, 2020 and 2019: Equity Attributable to Noncontrolling Interest Mezzanine Equity - Redeemable Noncontrolling Interests Ares JV BSP JV Total Ares JV Elk Hills Carbon JV Total (in millions) Balance, December 31, 2019 $ — $ 93 $ 93 $ 802 $ — $ 802 Net income (loss) attributable to noncontrolling interests 3 9 12 86 (1) 85 Return from noncontrolling interest — — — (138) — (138) Contributions from noncontrolling interest holders, net — — — — 1 1 Distributions to noncontrolling interest holders (3) (34) (37) (58) — (58) Balance, September 30, 2020 $ — $ 68 $ 68 $ 692 $ — $ 692 Balance, December 31, 2018 $ 15 $ 99 $ 114 $ 756 $ — $ 756 Net (loss) income attributable to noncontrolling interests (9) 7 (2) 87 — 87 Contributions from noncontrolling interest holders, net — 49 49 — — — Distributions to noncontrolling interest holders (6) (55) (61) (54) — (54) Balance, September 30, 2019 $ — $ 100 $ 100 $ 789 $ — $ 789 Ares JV In February 2018, our wholly-owned subsidiary California Resources Elk Hills, LLC (CREH) entered into a midstream JV with ECR, a portfolio company of Ares. The Ares JV holds the Elk Hills power plant (a 550-megawatt natural gas fired power plant) and a 200 MMcf/d cryogenic gas processing plant. On the Effective Date, as required by the Note Purchase Agreement, CREH transferred its ownership of two low temperature separation plants located at the Elk Hills field to Elk Hills Power. Prior to our Effective Date, we held 50% of the Class A common interest and 95.25% of the Class C common interest in the Ares JV. ECR held 50% of the Class A common interest, 100% of the Class B preferred interest and 4.75% of the Class C common interest. The Ares JV was required to distribute each month its excess cash flow over its working capital requirements first to the Class B holders and then to the Class C common interests, on a pro-rata basis. As contemplated by the terms of the JV, CREH purchased electricity and gas processing services from the Ares JV (subject to certain limitations, including certain geographical limitations) in exchange for monthly capacity payments pursuant to the terms of a Commercial Agreement, the proceeds of which were used by the Ares JV to make distributions as contemplated by the Second Amended and Restated Limited Liability Company Agreement of Elk Hills Power, LLC. CREH also served as the operator of the Ares JV and provided operational and support services in exchange for a monthly fee pursuant to a Master Services Agreement. These agreements became intercompany agreements on the Effective Date and were cancelled as described below. As described in Note 1 Chapter 11 Proceedings , we entered into the Settlement Agreement with ECR and Ares which, among other things, changed the liquidation preference for the Class B member interest to $835 million, decreased the preferred return from 13.5% per annum to 9.5% per annum payable at the end of each month, removed the liquidation premium for the Class A common interest and removed the payment of any previously accrued but unpaid preferred distributions plus a make-whole payment that ECR, as the holder of the Class B preferred interests, would otherwise have been entitled to in the event of a redemption transaction. The Settlement Agreement granted us the right (Conversion Right) to acquire all (but not less than all) of the equity interests of Elk Hills Power owned by ECR in exchange for the EHP Notes, Ares Settlement Stock and $2.5 million in cash. The Conversion Right was deemed to have been exercised on the Effective Date. Although certain provisions in the Settlement Agreement were not effective until certain conditions were met, such as the Bankruptcy Court entering a final order, we determined that the amended terms were substantively different such that the existing Class A common, Class B preferred and Class C common member interests held by ECR were treated as redeemed in exchange for new member interests issued at fair value. The estimated fair value of the new member interests was lower than the carrying value of the existing member interests by $138 million. In accordance with GAAP, the return from noncontrolling interest holders was recorded to additional paid-in capital on our condensed consolidated balance sheet as of September 30, 2020. However, as required by GAAP, the return is included in our earnings per share calculations. See Note 10 Earnings Per Share for adjustments to net income (loss) attributable to common stock which includes a return from noncontrolling interest holders. We were deemed to have exercised the Conversion Right on the Effective Date and we issued the EHP Notes in the aggregate principal amount of $300 million, Ares Settlement Stock comprising approximately 20.8% (subject to dilution) of the new common stock (Conversion) and $2.5 million in cash. Upon the Conversion, Elk Hills Power became an indirect wholly-owned subsidiary, and Ares and its affiliates ceased to have any direct or indirect interest in Elk Hills Power, other than any interest Ares may have indirectly through its interests in the EHP Notes and Ares Settlement Stock. In connection with the Conversion, Elk Hills Power’s limited liability company agreement was amended and restated. In connection with the Conversion, on the Effective Date, we entered into a Sponsor Support Agreement dated the Effective Date (Support Agreement) pursuant to which, among other things, the parties agreed that Elk Hills Power will be our primary provider of electricity to, and will be the primary processor of our natural gas produced from, the Elk Hills field, which is already consistent with our current practice. On the Effective Date, in connection with the Conversion, we terminated: (a) the Commercial Agreement, dated as of February 7, 2018, by and between Elk Hills Power and CREH and (b) the Master Services Agreement, dated as of February 7, 2018, by and between Elk Hills Power and CREH. Our condensed consolidated statements of operations for all periods presented reflect the operations of the Ares JV, with ECR's share of net income (loss) reported in net income attributable to noncontrolling interests. ECR's redeemable noncontrolling interests are reported in mezzanine equity due to an embedded optional redemption feature. Benefit Street Partners (BSP) JV Our condensed consolidated results reflect the operations of our development JV with BSP, with BSP's preferred interest reported in equity on our condensed consolidated balance sheets and BSP’s share of net income (loss) reported in net income attributable to noncontrolling interests in our condensed consolidated statements of operations for all periods presented. Elk Hills Carbon JV In January 2020, we entered into an agreement with OGCI Climate Investments LLP (OGCI) to determine the technical and economic feasibility of retrofitting the Elk Hills power plant with a post-combustion, carbon-capture system, which includes a front-end engineering design scope and study. The project received financial assistance from the U.S. Department of Energy and project participants include us, Electric Power Research Institute, and Fluor Corporation. We formed Elk Hills Carbon LLC (Elk Hills Carbon JV) with OGCI to assist with the initial funding obligation. OGCI contributed approximately $2 million to the Elk Hills Carbon JV in February 2020. Our condensed consolidated statements of operations reflect the operations of the Elk Hills Carbon JV, with OGCI's share of net income (loss) reported in net income attributable to noncontrolling interests for all periods presented. OGCI's redeemable noncontrolling interests are reported in mezzanine equity due to an optional redemption feature. Other In July 2019, we entered into a development joint venture with Alpine Energy Capital, LLC (Alpine) to develop portions of our Elk Hills field (Alpine JV). Alpine made an initial commitment to invest $320 million over a period of up to three years in accordance with a 275-well development plan. On March 27, 2020 , Alpine elected to suspend its funding obligations pursuant to a contractual right that was triggered when the average NYMEX 12-month forward strip price for Brent crude oil fell below $45 per barrel over a 30-trading day period. The suspension may be lifted by mutual consent. As of September 30, 2020, funding for the initial development phase has not re-started. For more information on our other joint ventures that are unconsolidated joint ventures, including the Alpine JV, the JV with Macquarie Infrastructure and Real Assets Inc. (MIRA JV), and the JV with Royale Energy, Inc. (Royale JV), please see our most recent Form 10-K for the year ended December 31, 2019. |
LAWSUITS, CLAIMS, COMMITMENTS A
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES | LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES 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, 2020 and December 31, 2019 were not material to our condensed consolidated 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 would not be material to our condensed consolidated financial statements taken as a whole. Subject to certain exceptions under the Bankruptcy Code, the filing of the Chapter 11 Cases on July 15, 2020 automatically stayed, among other things, the continuation of most judicial or administrative proceedings or the filing of other actions against or on behalf of us or our property to recover on, collect or secure a claim arising prior to July 15, 2020 or to exercise control over property of our bankruptcy estates, unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such action or judicial or administrative proceeding. Notwithstanding the general application of the automatic stay described above, government authorities may determine to continue actions brought under regulatory powers. On October 13, 2020, the Bankruptcy Court confirmed our Amended Debtors’ Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES We use a variety of derivative instruments in implementing our hedging program to protect our cash flow, operating margin and capital program from the cyclical nature of commodity prices and interest-rate movements. These derivatives are intended to help us maintain adequate liquidity and improve our ability to comply with the covenants of our credit facilities in case of price deterioration. We did not have any derivative instruments designated as accounting hedges as of and during the three and nine months ended September 30, 2020 and 2019. Unless otherwise indicated, we use the term "hedge" to describe derivative instruments that are designed to achieve our hedging program goals, even though they are not accounted for as accounting hedges. In March 2020, we monetized all of our crude oil hedges in place for April 2020 forward with our counterparties, except for certain hedges held by our BSP JV, for approximately $63 million. We recognized the proceeds received in net derivative gain (loss) from commodity contracts on our condensed consolidated statements of operations in the first quarter of 2020. The Senior DIP Credit Agreement required us to enter into hedging arrangements covering at least 25% of our share of expected crude oil production for the next twelve months. On July 17, 2020, the Bankruptcy Court authorized us to engage in hedging activities. We entered into various derivative instruments, as shown in the table below, to satisfy this requirement. We held the following Brent-based crude oil contracts as of September 30, 2020: Q4 Q1 Q2 July 2021 Sold Calls: Barrels per day 4,800 4,500 4,500 4,200 Weighted-average price per barrel $ 48.05 $ 48.05 $ 48.05 $ 48.05 Purchased Puts: Barrels per day 18,600 18,000 9,000 8,400 Weighted-average price per barrel $ 44.84 $ 45.00 $ 40.00 $ 40.00 Sold Puts: Barrels per day 13,800 13,500 4,500 4,200 Weighted-average price per barrel $ 36.52 $ 36.67 $ 30.00 $ 30.00 Swaps: Barrels per day 6,400 6,000 6,000 5,600 Weighted-average price per barrel $ 44.75 $ 44.75 $ 44.75 $ 44.75 The outcomes of the derivative positions are as follows: • Sold calls – we make settlement payments for prices above the indicated weighted-average price per barrel. • Purchased puts – we receive settlement payments for prices below the indicated weighted-average price per barrel. • Sold puts – we make settlement payments for prices below the indicated weighted-average price per barrel. The BSP JV holds crude oil derivatives and natural gas swaps for insignificant volumes through 2021 that are included in our consolidated results. The hedges entered into by the BSP JV could affect the timing of the redemption of BSP's preferred interest. The following tables present the fair values on a recurring basis (at gross and net) of our outstanding commodity derivatives as of September 30, 2020 and December 31, 2019: September 30, 2020 Balance Sheet Classification Gross Amounts Recognized at Fair Value Gross Amounts Offset in the Balance Sheet Net Fair Value Presented in the Balance Sheet Assets: (in millions) Other current assets, net $ 24 $ (7) $ 17 Other assets — — — Liabilities: Accrued liabilities (9) 7 (2) Total derivatives $ 15 $ — $ 15 December 31, 2019 Balance Sheet Classification Gross Amounts Recognized at Fair Value Gross Amounts Offset in the Balance Sheet Net Fair Value Presented in the Balance Sheet Assets: (in millions) Other current assets, net $ 49 $ (10) $ 39 Other assets 1 — 1 Liabilities: Accrued liabilities (15) 10 (5) Total derivatives $ 35 $ — $ 35 We hold derivative contracts that limit our interest-rate exposure with respect to $1.3 billion of our variable-rate indebtedness. These interest-rate contracts reset monthly and require the counterparties to pay any excess interest owed on such amount in the event the one-month LIBOR exceeds 2.75% for any monthly period prior to May 2021. For the three months ended September 30, 2020 and 2019, we reported no change in fair value on these contracts in other non-operating expenses on our consolidated statements of operations. For the nine months ended September 30, 2020 and 2019, we reported no change in fair value and a loss of $4 million, respectively, on these contracts in other non-operating expenses on our condensed consolidated statements of operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Upon our emergence from bankruptcy on October 27, 2020, as discussed in Note 1 Chapter 11 Proceedings , our then common and preferred stock, including contracts on our equity, were cancelled and new common stock and Warrants were issued. The per share amounts disclosed below would be materially different if our emergence from bankruptcy had occurred on or before September 30, 2020. We compute basic and diluted earnings per share (EPS) using the two-class method required for participating securities. Certain of our restricted and performance stock awards are considered participating securities because they have non-forfeitable dividend rights at the same rate as our common stock. Under the two-class method, undistributed earnings allocated to participating securities are subtracted from net income attributable to common stock in determining net income available to common stockholders. In loss periods, no allocation is made to participating securities because participating securities do not share in losses. For basic EPS, the weighted-average number of common shares outstanding excludes outstanding shares related to unvested restricted stock awards. For diluted EPS, the basic shares outstanding are adjusted by adding all potentially dilutive securities. The following table presents the calculation of basic and diluted EPS, prior to our emergence, for the three and nine months ended September 30, 2020 and 2019: Three months ended Nine months ended 2020 2019 2020 2019 Basic EPS calculation (in millions, except per-share amounts) Net (loss) income $ (7) $ 127 $ (1,999) $ 124 Less: net income attributable to noncontrolling interests (22) (33) (97) (85) Net (loss) income attributable to common stock (29) 94 (2,096) 39 Adjustments: Net income allocated to participating securities — (1) — (1) Return from noncontrolling interest holders (a) 138 — 138 — Net income (loss) available to common shares 109 93 (1,958) 38 Weighted-average common shares outstanding — basic 49.5 49.1 49.4 48.9 Basic EPS $ 2.20 $ 1.89 $ (39.64) $ 0.78 Diluted EPS calculation Net (loss) income $ (7) $ 127 $ (1,999) $ 124 Less: net income attributable to noncontrolling interests (22) (33) (97) (85) Net (loss) income attributable to common stock (29) 94 (2,096) 39 Adjustments: Net income allocated to participating securities — (1) — (1) Return from noncontrolling interest holders (a) 138 — 138 — Net income (loss) available to common shares 109 93 (1,958) 38 Weighted-average common shares outstanding — basic 49.5 49.1 49.4 48.9 Dilutive effect of potentially dilutive securities — 0.1 — 0.3 Weighted-average common shares outstanding — diluted 49.5 49.2 49.4 49.2 Diluted EPS $ 2.20 $ 1.89 $ (39.64) $ 0.77 Weighted-average anti-dilutive shares 3.3 3.2 4.4 2.3 (a) Return from noncontrolling interest holders relates to the deemed redemption of the noncontrolling interests in the Ares JV. For more information on the Ares JV and the Settlement Agreement, see Note 7 Joint Ventures . |
PENSION AND POSTRETIREMENT BENE
PENSION AND POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
PENSION AND POSTRETIREMENT BENEFIT PLANS | PENSION 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 months ended September 30, 2020 and 2019: Three months ended September 30, 2020 2019 Pension Postretirement Pension Postretirement (in millions) Service cost $ — $ 1 $ — $ 1 Interest cost — 1 — 1 Expected return on plan assets — — (1) — Recognized actuarial loss — — 1 — Settlement loss — — — — Total $ — $ 2 $ — $ 2 Nine months ended September 30, 2020 2019 Pension Postretirement Pension Postretirement (in millions) Service cost $ 1 $ 3 $ 1 $ 3 Interest cost 1 3 2 3 Expected return on plan assets (1) — (2) — Recognized actuarial loss 1 — 1 — Settlement loss — — 1 — Total $ 2 $ 6 $ 3 $ 6 We did not make any significant contributions to our defined benefit pension plans for the three and nine months ended September 30, 2020. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020 and allowed for the deferral of contributions to a single employer pension plan otherwise due during 2020 to January 1, 2021. We deferred contributions to our defined benefit pension plans of approximately $5 million for the first nine months of 2020 until December 2020. We made contributions of $1 million and $2 million, respectively for the three months and nine months ended September 30, 2019. The post-retirement benefit cost associated with our August 2020 workforce reduction was not significant. The 2019 settlement loss, which was reclassified from accumulated other comprehensive income, was associated with early retirements and workforce reductions. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION We derive most of our revenue from sales of oil, natural gas and NGLs, with the remaining revenue generated from sales of electricity and marketing activities related to storage and managing excess pipeline capacity. The following table provides disaggregated revenue for the three and nine months ended September 30, 2020 and 2019: Three months ended Nine months ended 2020 2019 2020 2019 (in millions) Oil and natural gas sales: Oil $ 246 $ 457 $ 795 $ 1,433 Natural gas 34 50 98 155 NGLs 32 34 94 132 312 541 987 1,720 Other revenue: Electricity sales 43 38 75 88 Marketing and trading revenue 50 62 109 230 Other revenue 4 3 12 17 97 103 196 335 Net derivative gain (loss) from commodity contracts — 37 75 (31) Total revenues $ 409 $ 681 $ 1,258 $ 2,024 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES Balance sheet information related to our operating and finance leases as of September 30, 2020 and December 31, 2019 was as follows: Balance Sheet Location September 30, 2020 December 31, 2019 (in millions) (in millions) Right-of-use assets: Operating lease, net Other assets $ 43 $ 59 Finance lease, net PP&E 1 2 Total right-of-use assets $ 44 $ 61 Lease liabilities: Current Operating lease Accrued liabilities $ 10 $ 27 Finance lease Accrued liabilities 1 1 Long-term Operating lease Other long-term liabilities 31 37 Finance lease Other long-term liabilities — 1 Total lease liabilities $ 42 $ 66 Our operating lease assets and liabilities decreased from year end 2019 primarily due to releasing five of our leased drilling rigs in the first quarter of 2020 in response to the industry downturn and economic environment. Our remaining two leased drilling rigs have been cold stacked and were included with our proved properties in our impairment assessment as discussed in Note 15 Asset Impairments |
LEASES | LEASES Balance sheet information related to our operating and finance leases as of September 30, 2020 and December 31, 2019 was as follows: Balance Sheet Location September 30, 2020 December 31, 2019 (in millions) (in millions) Right-of-use assets: Operating lease, net Other assets $ 43 $ 59 Finance lease, net PP&E 1 2 Total right-of-use assets $ 44 $ 61 Lease liabilities: Current Operating lease Accrued liabilities $ 10 $ 27 Finance lease Accrued liabilities 1 1 Long-term Operating lease Other long-term liabilities 31 37 Finance lease Other long-term liabilities — 1 Total lease liabilities $ 42 $ 66 Our operating lease assets and liabilities decreased from year end 2019 primarily due to releasing five of our leased drilling rigs in the first quarter of 2020 in response to the industry downturn and economic environment. Our remaining two leased drilling rigs have been cold stacked and were included with our proved properties in our impairment assessment as discussed in Note 15 Asset Impairments |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We estimate our annual effective income tax rate to record our quarterly provision in the jurisdictions in which we operate. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. We maintained a full valuation allowance against our net deferred tax assets after considering cumulative losses, including oil and natural gas asset impairments. For the nine months ended September 30, 2020 and 2019, we did not provide any current or deferred tax provision or benefit. The difference between our statutory tax rate and our effective tax rate of zero for all periods presented includes changes to maintain our full valuation allowance against our net deferred tax assets given our recent and anticipated future earnings trends. We believe that there is a reasonable possibility that some or all of this allowance could be released in the foreseeable future. However, the amount of the net deferred tax assets considered realizable depends on the level of profitability that we can achieve. The CARES Act increased the limitation on the deductibility of business interest expense from 30% to 50% of adjusted taxable income in 2019 and 2020 along with other provisions intended to provide relief to corporate taxpayers. There was no impact on our income tax provision due to our full valuation allowance. On July 28, 2020 the Internal Revenue Service (IRS) issued final and new proposed regulations related to the limitation on the deduction for business interest. The final regulations in the regulation package were published in the Federal Register on September 14, 2020 and are effective for tax years beginning on or after November 13, 2020. Although not yet effective, the publication of the final regulations clarified the amount of allowed addback for depreciation, depletion and amortization in the calculation of the limitation on the deduction of business interest expense. Based on our evaluation, these final regulations did not have a significant impact on our financial statements taken as a whole due to our full valuation allowance. Certain of the transactions occurring upon our emergence from bankruptcy, and application of fresh start accounting, may have a material impact on our deferred tax balances, the full extent of which is currently unknown. Cancellation of debt income resulting from these transactions will primarily reduce our tax attributes, including but not limited to our net operating loss carryforwards, and our tax basis in property, plant and equipment. Further, as discussed in Note 1 Chapter 11 Proceedings , our pre-emergence common stock was cancelled and new common stock was issued on the Effective Date. This resulted in a change in ownership and, under IRC Section 382, may limit the deduction of our pre-emergence tax attributes, if any, and interest expense carryforwards. Additionally, we have incurred a significant amount of legal and professional fees related to the reorganization, a substantial portion of which may not be deductible for income tax purposes. |
ASSET IMPAIRMENTS
ASSET IMPAIRMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
ASSET IMPAIRMENTS | ASSET IMPAIRMENTS During the quarter ended March 31, 2020, we recorded a $1.7 billion impairment triggered by the sharp drop in commodity prices at the end of the first quarter of 2020 due to decreased demand for oil and natural gas products as a result of the Coronavirus Disease 2019 (COVID-19) pandemic coupled with the over-supply resulting from a price war between members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia and other allied producing countries. The following table presents a summary of our asset impairments as of our March 31, 2020 assessment date (in millions): Proved oil and natural gas properties $ 1,487 Unproved properties 228 Other 21 Total $ 1,736 Proved oil and natural gas properties — The fair values of our proved oil and natural gas properties were determined as of the date of the assessment using discounted cash flow models incorporating a number of fair value inputs which are categorized as Level 3 on the fair value hierarchy. These inputs were based on management's expectations for the future considering the then-current environment and included index prices based on forward curves until the market became illiquid and internally generated price forecasts thereafter, pricing adjustments for differentials, estimates of future oil and natural gas production, estimated future operating costs and capital development plans based on the embedded price assumptions. We used a market-based weighted average cost of capital to discount the future net cash flows. The impairment charge primarily related to a steamflood property located in the San Joaquin basin. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
EQUITY | EQUITY Chapter 11 Proceedings On the Effective Date, as discussed in Note 1 Chapter 11 Proceedings , our pre-emergence authorized common and preferred stock were cancelled, pursuant to the Plan. Holders of our pre-emergence issued and outstanding common stock, including holders of contracts on our equity, did not receive any recovery. Employee Stock Purchase Plan On May 26, 2020, our then Board of Directors approved the termination of the California Resources Corporation 2014 Employee Stock Purchase Plan. No additional shares were issued under the plan after March 31, 2020. Post-Emergence Equity On the Effective Date, we issued an aggregate 83.3 million shares of new common stock, par value $0.01 per share, to the holders of allowed claims and ECR, as defined in the Plan. We reserved an aggregate 4.4 million shares of new common stock for future issuances in connection with the exercise of Warrants. In accordance with the Plan, our new common stock was issued as follows: • 17.3 million shares to Ares as partial consideration for its member interests in the Ares JV; • 27.1 million shares to our pre-petition creditor group in cancellation of their outstanding debt plus accrued interest up to the petition date; • 33 million shares in our Subscription Rights offering and 1.6 million shares to backstop parties in exchange for $446 million (net of a $4 million fee); • 3.5 million shares to backstop parties for the backstop commitment premium; and • Approximately 821,000 shares for a Junior DIP Facility exit fee. Before we emerged from the Chapter 11 Cases, our new common stock was approved for trading on the NYSE. On the Effective Date, we filed a Form 8-A to register the new common stock under Section 12(b) of the Exchange Act. Trading in the new common stock commenced on the NYSE on October 28, 2020 under the ticker "CRC". Warrants As discussed in Note 1 Chapter 11 Proceedings , on the Effective Date, we reserved an aggregate 4.4 million shares for Warrants. The Tier 1 Warrants and Tier 2 Warrants are exercisable for 2% of the outstanding shares of new common stock and 3% of the outstanding new common stock (on a fully diluted basis calculated immediately after the Effective Date), respectively, both at an initial exercise price of $36 per share. The Warrants are exercisable from the Effective Date for a period of four years. The Warrant Agreement contains customary anti-dilution adjustments in the event of any stock split, reverse stock split, stock dividend, equity awards under a management incentive plan that our Board of Directors may establish pursuant to the Plan (if any) or other distributions. The warrant holder may elect, in its sole discretion, to pay cash or to exercise on a cashless basis, pursuant to which the holder will not be required to pay cash for shares of common stock upon exercise of the warrant but will instead receive fewer shares. Unregistered Issuance of Equity Securities Other than the shares issued in reliance of Section 4(a)(2) of the Securities Act as described below, we relied on Section 1145(a)(1) of the Bankruptcy Code as an exemption from the registration requirements of the Securities Act for the issuance of our new common stock and warrants. Section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale of securities under a plan of reorganization from registration under Section 5 of the Securities Act and state laws if three principal requirements are satisfied: • The securities must be issued under a plan of reorganization by the debtor, its successor under a plan, or an affiliate participating in a joint plan of reorganization with the debtor; • The recipients of the securities must hold a claim against, an interest in, or a claim for administrative expense in the case concerning the debtor or such affiliate; and • The securities must be issued either (a) in exchange for the recipient’s claim against, interest in or claim for administrative expense in the case concerning the debtor or such affiliate or (b) principally in such exchange and partly for cash or property. The (a) shares of new common stock issued pursuant to the Backstop Commitment Agreement, (b) shares of new common stock issued in connection with the payment of the backstop commitment premium and the exit fee for the Junior DIP Facility, and (c) Ares Settlement Stock issued to Ares pursuant to the Settlement Agreement were issued in each case without registration in reliance upon the exemption set forth in Section 4(a)(2) of the Securities Act and are therefore “restricted securities.” |
CONDENSED COMBINED DEBTOR-IN-PO
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION | CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION The financial statements below represent the unaudited condensed combined financial statements of the Debtors. Effective July 1, 2020, the results of the non-filing entities, which are comprised primarily of our consolidated joint ventures (see Note 7 Joint Ventures ), are not included in these condensed combined financial statements. Intercompany transactions among the Debtors have been eliminated in the financial statements. Intercompany transactions among the Debtors and the non-Debtors have not been eliminated in these financial statements. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the Debtors operated as independent entities. Condensed Consolidating Debtors' Balance Sheet As of September 30, 2020 (in millions) (DEBTOR-IN-POSSESSION: Entity Operating Under Chapter 11) September 30, 2020 Total current assets $ 379 Investments in subsidiaries (261) Total property, plant and equipment, net 3,937 Other assets 61 TOTAL ASSETS $ 4,116 Total current liabilities 1,217 Other long-term liabilities 724 Liabilities subject to compromise 4,516 Total equity (2,341) TOTAL LIABILITIES AND EQUITY $ 4,116 Condensed Consolidating Debtors' Statement of Operations For the three months ended September 30, 2020 (in millions) (DEBTOR-IN-POSSESSION: Entity Operating Under Chapter 11) Three months ended September 30, 2020 Total revenues $ 357 Total costs 436 Non-operating income 6 NET LOSS $ (73) Condensed Consolidating Debtors' Statement of Cash Flows For the three months ended September 30, 2020 (in millions) (DEBTOR-IN-POSSESSION: Entity Operating Under Chapter 11) Three months ended September 30, 2020 Net cash used in operating activities $ (38) Net cash used in investing activities (1) Net cash provided by financing activities 31 Decrease in cash (8) Cash—beginning of period 105 Cash—end of period $ 97 |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule Of Liabilities Subject To Compromise | As of September 30, 2020, LSTC on our condensed consolidated balance sheet included the following: September 30, 2020 (in millions) Long-term debt (principal amount): 2017 Credit Agreement $ 1,300 2016 Credit Agreement 1,000 Second Lien Notes 1,808 5.5% Senior Notes due 2021 100 6% Senior Notes due 2024 144 Accrued interest on long-term debt 164 Total liabilities subject to compromise $ 4,516 |
Schedule of Reorganization Items in Consolidated Statement of Operations | Reorganization items, net consisted of the following for the three and nine months ended September 30, 2020 (in millions): Unamortized deferred gain and issuance costs, net (a) $ 125 Legal, professional and other, net (b) (34) Debtor-in-possession financing costs (25) Total reorganization items, net $ 66 (a) Reflects non-cash adjustments necessary to the carrying amount of our long-term debt to state such amounts at face value. |
OTHER INFORMATION (Tables)
OTHER INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OTHER INFORMATION | |
Schedule of other current assets, net | Other current assets, net as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, December 31, 2020 2019 (in millions) Amounts due from joint interest partners, net (a) $ 41 $ 70 Derivative assets 17 39 Prepaid expenses 24 19 Other — 2 Other current assets, net $ 82 $ 130 |
Schedule of accrued liabilities | Accrued liabilities as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, December 31, 2020 2019 (in millions) Accrued employee-related costs (a) $ 81 $ 116 Accrued taxes other than on income 64 57 Accrued interest 1 13 Lease liability 11 28 Asset retirement obligations 28 28 Other (b) 55 71 Accrued liabilities $ 240 $ 313 (a) Accrued employee-related costs declined $35 million primarily due to incentive, retention, and severance payments made to employees and former employees. (b) Other accrued liabilities declined $16 million primarily due to payments to joint interest partners and legal settlement payments. These decreases were partially offset by an increase in accrued legal and professional fees. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, December 31, 2020 2019 (in millions) Materials and supplies $ 58 $ 64 Finished goods 3 3 Total $ 61 $ 67 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of short-term debt | As of September 30, 2020 and December 31, 2019, our short-term debtor-in-possession (DIP) financing and current portion of long-term debt consisted of the following: Outstanding Principal Interest Rate Security September 30, 2020 December 31, 2019 ($ in millions) Senior DIP Facility $ 83 $ — LIBOR plus 4.5% ABR plus 3.5% Secured Superpriority Junior DIP Facility 650 — LIBOR plus 9.0% ABR plus 8.0% Secured Superpriority Current portion of long-term debt — 100 Total short-term borrowings and current maturities $ 733 $ 100 |
Schedule of long-term debt | As of September 30, 2020 and December 31, 2019, our long-term debt consisted of the following credit agreements, Second Lien Notes and Senior Notes: Outstanding Principal Interest Rate Security September 30, 2020 December 31, 2019 ($ in millions) Credit Agreements 2014 Revolving Credit Facility (a) — 518 LIBOR plus 3.25%-4.00% ABR plus 2.25%-3.00% Shared First-Priority Lien 2017 Credit Agreement 1,300 1,300 LIBOR plus 4.75% ABR plus 3.75% Shared First-Priority Lien 2016 Credit Agreement 1,000 1,000 LIBOR plus 10.375% ABR plus 9.375% First-Priority Lien Second Lien Notes Second Lien Notes 1,808 1,815 8% Second-Priority Lien Senior Notes 5% Senior Notes due 2020 — 100 5% Unsecured 5.5% Senior Notes due 2021 100 100 5.5% Unsecured 6% Senior Notes due 2024 144 144 6% Unsecured Outstanding long-term debt $ 4,352 $ 4,977 Less: Current portion of long-term debt — (100) Less: Amounts reclassified to LSTC (4,352) — Total long-term debt $ — $ 4,877 Note: For a detailed description of our credit agreements, Second Lien Notes and Senior Notes, please see our most recent Form 10-K for the year ended December 31, 2019. |
Schedule of financial performance covenants | Financial Covenants – Our Revolving Credit Facility includes the following financial covenants: Ratio Components Required Levels Tested Consolidated Total Net Leverage Ratio Ratio of consolidated total secured debt to consolidated EBITDAX (a) Not greater than 3.00 to 1.00 (c) Quarterly Current Ratio Ratio of consolidated current assets to consolidated current liabilities (b) Not less than 1.00 to 1.00 Quarterly (a) EBITDAX is calculated as defined in the credit agreement. (b) The available credit under our Revolving Credit Facility is included in consolidated current assets as part of the calculation of the current ratio. (c) In the event that the EHP Notes are not paid in full prior to December 31, 2021 (and until the EHP Notes are repaid in full), the Consolidated Total Net Leverage Ratio for the Test Period ending on December 31, 2021 and as of the last day of any Test Period ending thereafter may not exceed 2.50 to 1.00. Financial Covenants – Our Second Lien Term Loan includes the following financial covenants: Ratio Components Required Levels Tested Consolidated Total Net Leverage Ratio Ratio of consolidated total debt to consolidated EBITDAX (a) Not greater than 3.45 to 1.00 (c) Quarterly Current Ratio Ratio of consolidated current assets to consolidated current liabilities (b) Not less than 0.85 to 1.00 Quarterly (a) EBITDAX is calculated as defined in the credit agreement. (b) The available credit under our Revolving Credit Facility is included in consolidated current assets as part of the calculation of the current ratio. (c) In the event that the EHP Notes are not paid in full prior to December 31, 2021 (and until the EHP Notes are repaid in full), the Consolidated Total Net Leverage Ratio for the Test Period ending on December 31, 2021 and as of the last day of any Test Period ending thereafter may not exceed 2.875 to 1.00. |
JOINT VENTURES (Tables)
JOINT VENTURES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of changes in noncontrolling interests | The following table presents the changes in noncontrolling interests for our consolidated JVs, prior to our emergence, which are reported in equity and mezzanine equity on the condensed consolidated balance sheets for the nine months ended September 30, 2020 and 2019: Equity Attributable to Noncontrolling Interest Mezzanine Equity - Redeemable Noncontrolling Interests Ares JV BSP JV Total Ares JV Elk Hills Carbon JV Total (in millions) Balance, December 31, 2019 $ — $ 93 $ 93 $ 802 $ — $ 802 Net income (loss) attributable to noncontrolling interests 3 9 12 86 (1) 85 Return from noncontrolling interest — — — (138) — (138) Contributions from noncontrolling interest holders, net — — — — 1 1 Distributions to noncontrolling interest holders (3) (34) (37) (58) — (58) Balance, September 30, 2020 $ — $ 68 $ 68 $ 692 $ — $ 692 Balance, December 31, 2018 $ 15 $ 99 $ 114 $ 756 $ — $ 756 Net (loss) income attributable to noncontrolling interests (9) 7 (2) 87 — 87 Contributions from noncontrolling interest holders, net — 49 49 — — — Distributions to noncontrolling interest holders (6) (55) (61) (54) — (54) Balance, September 30, 2019 $ — $ 100 $ 100 $ 789 $ — $ 789 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of oil hedge positions | We held the following Brent-based crude oil contracts as of September 30, 2020: Q4 Q1 Q2 July 2021 Sold Calls: Barrels per day 4,800 4,500 4,500 4,200 Weighted-average price per barrel $ 48.05 $ 48.05 $ 48.05 $ 48.05 Purchased Puts: Barrels per day 18,600 18,000 9,000 8,400 Weighted-average price per barrel $ 44.84 $ 45.00 $ 40.00 $ 40.00 Sold Puts: Barrels per day 13,800 13,500 4,500 4,200 Weighted-average price per barrel $ 36.52 $ 36.67 $ 30.00 $ 30.00 Swaps: Barrels per day 6,400 6,000 6,000 5,600 Weighted-average price per barrel $ 44.75 $ 44.75 $ 44.75 $ 44.75 |
Schedule of derivative instruments in statement of financial position, fair value | The following tables present the fair values on a recurring basis (at gross and net) of our outstanding commodity derivatives as of September 30, 2020 and December 31, 2019: September 30, 2020 Balance Sheet Classification Gross Amounts Recognized at Fair Value Gross Amounts Offset in the Balance Sheet Net Fair Value Presented in the Balance Sheet Assets: (in millions) Other current assets, net $ 24 $ (7) $ 17 Other assets — — — Liabilities: Accrued liabilities (9) 7 (2) Total derivatives $ 15 $ — $ 15 December 31, 2019 Balance Sheet Classification Gross Amounts Recognized at Fair Value Gross Amounts Offset in the Balance Sheet Net Fair Value Presented in the Balance Sheet Assets: (in millions) Other current assets, net $ 49 $ (10) $ 39 Other assets 1 — 1 Liabilities: Accrued liabilities (15) 10 (5) Total derivatives $ 35 $ — $ 35 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted EPS | The following table presents the calculation of basic and diluted EPS, prior to our emergence, for the three and nine months ended September 30, 2020 and 2019: Three months ended Nine months ended 2020 2019 2020 2019 Basic EPS calculation (in millions, except per-share amounts) Net (loss) income $ (7) $ 127 $ (1,999) $ 124 Less: net income attributable to noncontrolling interests (22) (33) (97) (85) Net (loss) income attributable to common stock (29) 94 (2,096) 39 Adjustments: Net income allocated to participating securities — (1) — (1) Return from noncontrolling interest holders (a) 138 — 138 — Net income (loss) available to common shares 109 93 (1,958) 38 Weighted-average common shares outstanding — basic 49.5 49.1 49.4 48.9 Basic EPS $ 2.20 $ 1.89 $ (39.64) $ 0.78 Diluted EPS calculation Net (loss) income $ (7) $ 127 $ (1,999) $ 124 Less: net income attributable to noncontrolling interests (22) (33) (97) (85) Net (loss) income attributable to common stock (29) 94 (2,096) 39 Adjustments: Net income allocated to participating securities — (1) — (1) Return from noncontrolling interest holders (a) 138 — 138 — Net income (loss) available to common shares 109 93 (1,958) 38 Weighted-average common shares outstanding — basic 49.5 49.1 49.4 48.9 Dilutive effect of potentially dilutive securities — 0.1 — 0.3 Weighted-average common shares outstanding — diluted 49.5 49.2 49.4 49.2 Diluted EPS $ 2.20 $ 1.89 $ (39.64) $ 0.77 Weighted-average anti-dilutive shares 3.3 3.2 4.4 2.3 (a) Return from noncontrolling interest holders relates to the deemed redemption of the noncontrolling interests in the Ares JV. For more information on the Ares JV and the Settlement Agreement, see Note 7 Joint Ventures . |
PENSION AND POSTRETIREMENT BE_2
PENSION AND POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of components of the net periodic benefit costs | 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 months ended September 30, 2020 and 2019: Three months ended September 30, 2020 2019 Pension Postretirement Pension Postretirement (in millions) Service cost $ — $ 1 $ — $ 1 Interest cost — 1 — 1 Expected return on plan assets — — (1) — Recognized actuarial loss — — 1 — Settlement loss — — — — Total $ — $ 2 $ — $ 2 Nine months ended September 30, 2020 2019 Pension Postretirement Pension Postretirement (in millions) Service cost $ 1 $ 3 $ 1 $ 3 Interest cost 1 3 2 3 Expected return on plan assets (1) — (2) — Recognized actuarial loss 1 — 1 — Settlement loss — — 1 — Total $ 2 $ 6 $ 3 $ 6 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue | The following table provides disaggregated revenue for the three and nine months ended September 30, 2020 and 2019: Three months ended Nine months ended 2020 2019 2020 2019 (in millions) Oil and natural gas sales: Oil $ 246 $ 457 $ 795 $ 1,433 Natural gas 34 50 98 155 NGLs 32 34 94 132 312 541 987 1,720 Other revenue: Electricity sales 43 38 75 88 Marketing and trading revenue 50 62 109 230 Other revenue 4 3 12 17 97 103 196 335 Net derivative gain (loss) from commodity contracts — 37 75 (31) Total revenues $ 409 $ 681 $ 1,258 $ 2,024 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of supplemental balance sheet information related to operating leases | Balance sheet information related to our operating and finance leases as of September 30, 2020 and December 31, 2019 was as follows: Balance Sheet Location September 30, 2020 December 31, 2019 (in millions) (in millions) Right-of-use assets: Operating lease, net Other assets $ 43 $ 59 Finance lease, net PP&E 1 2 Total right-of-use assets $ 44 $ 61 Lease liabilities: Current Operating lease Accrued liabilities $ 10 $ 27 Finance lease Accrued liabilities 1 1 Long-term Operating lease Other long-term liabilities 31 37 Finance lease Other long-term liabilities — 1 Total lease liabilities $ 42 $ 66 |
ASSET IMPAIRMENTS (Tables)
ASSET IMPAIRMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of asset impairments | The following table presents a summary of our asset impairments as of our March 31, 2020 assessment date (in millions): Proved oil and natural gas properties $ 1,487 Unproved properties 228 Other 21 Total $ 1,736 |
CONDENSED COMBINED DEBTOR-IN-_2
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed debtor's balance sheet | The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the Debtors operated as independent entities. Condensed Consolidating Debtors' Balance Sheet As of September 30, 2020 (in millions) (DEBTOR-IN-POSSESSION: Entity Operating Under Chapter 11) September 30, 2020 Total current assets $ 379 Investments in subsidiaries (261) Total property, plant and equipment, net 3,937 Other assets 61 TOTAL ASSETS $ 4,116 Total current liabilities 1,217 Other long-term liabilities 724 Liabilities subject to compromise 4,516 Total equity (2,341) TOTAL LIABILITIES AND EQUITY $ 4,116 |
Schedule of condensed income statement | Condensed Consolidating Debtors' Statement of Operations For the three months ended September 30, 2020 (in millions) (DEBTOR-IN-POSSESSION: Entity Operating Under Chapter 11) Three months ended September 30, 2020 Total revenues $ 357 Total costs 436 Non-operating income 6 NET LOSS $ (73) |
Schedule of condensed cash flow statement | Condensed Consolidating Debtors' Statement of Cash Flows For the three months ended September 30, 2020 (in millions) (DEBTOR-IN-POSSESSION: Entity Operating Under Chapter 11) Three months ended September 30, 2020 Net cash used in operating activities $ (38) Net cash used in investing activities (1) Net cash provided by financing activities 31 Decrease in cash (8) Cash—beginning of period 105 Cash—end of period $ 97 |
CHAPTER 11 PROCEEDINGS (Details
CHAPTER 11 PROCEEDINGS (Details) $ / shares in Units, shares in Millions, $ in Millions | Oct. 27, 2020USD ($)director$ / sharesshares | Aug. 31, 2020employee | Jul. 31, 2020employee | Nov. 30, 2014USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | May 31, 2015USD ($) |
Debt instrument | |||||||
Outstanding long-term debt | $ 6,800 | ||||||
Liabilities subject to compromise | $ 4,516 | $ 0 | |||||
Reduction of headcount, number of employees | employee | 1,100 | 1,250 | |||||
Reorganization items, net (non-cash) | 10 | ||||||
Subsequent Event | |||||||
Debt instrument | |||||||
New common stock issued (in shares) | shares | 83.3 | ||||||
Shares reserved for future issuance (in shares) | shares | 4.4 | ||||||
Investment warrants, exercise price (in dollars per share) | $ / shares | $ 36 | ||||||
Number of new directors | director | 7 | ||||||
Subsequent Event | 2017 Credit Agreement | |||||||
Debt instrument | |||||||
New common stock issued (in shares) | shares | 22.7 | ||||||
Subsequent Event | 2016 Credit Agreement, Second Lien Notes, 2021 Notes And 2024 Notes | |||||||
Debt instrument | |||||||
New common stock issued (in shares) | shares | 4.4 | ||||||
Occidental | |||||||
Debt instrument | |||||||
Dividends paid | $ 6,000 | ||||||
Subscription Rights | Subsequent Event | |||||||
Debt instrument | |||||||
New common stock issued (in shares) | shares | 34.6 | ||||||
Proceeds from common stock issued | $ 446 | ||||||
Payments for issuance fee | $ 4 | ||||||
Subscription Right, Backstop Commitment Agreement | Subsequent Event | |||||||
Debt instrument | |||||||
New common stock issued (in shares) | shares | 3.5 | ||||||
Tier 1 Warrants | Subsequent Event | |||||||
Debt instrument | |||||||
Warrants exercisable (in percent) | 2.00% | ||||||
Tier 2 Warrants | Subsequent Event | |||||||
Debt instrument | |||||||
Warrants exercisable (in percent) | 3.00% | ||||||
Debt Prior To Bankruptcy | |||||||
Debt instrument | |||||||
Outstanding long-term debt | 5,100 | ||||||
Liabilities subject to compromise | $ 4,400 | ||||||
5.5% Senior Notes due 2021 | Senior Notes | |||||||
Debt instrument | |||||||
Debt instrument, interest rate, stated percentage | 5.50% | ||||||
6% Senior Notes due 2024 | Senior Notes | |||||||
Debt instrument | |||||||
Debt instrument, interest rate, stated percentage | 6.00% | ||||||
5% Senior Notes due 2020 | Senior Notes | |||||||
Debt instrument | |||||||
Debt instrument, interest rate, stated percentage | 5.00% | ||||||
Second Lien Notes | Lien Notes | |||||||
Debt instrument | |||||||
Debt instrument, interest rate, stated percentage | 8.00% | ||||||
EHP Notes | Subsequent Event | |||||||
Debt instrument | |||||||
Percentage of common acquired | 20.80% | ||||||
Cash acquired | $ 2.5 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Debt instrument | |
Percentage of voting shares received by existing holders | 50.00% |
Contractual interest | $ 289 |
Contractual interest not recognized in financial statements | 72 |
Minimum | |
Debt instrument | |
Enterprise value of successor company approved by bankruptcy court | 2,200 |
Maximum | |
Debt instrument | |
Enterprise value of successor company approved by bankruptcy court | $ 2,800 |
BASIS OF PRESENTATION - Liabili
BASIS OF PRESENTATION - Liabilities Subject to Compromise – Liabilities Subject to Compromise – Pre-petition Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt instrument | ||
Accrued interest on long-term debt | $ 164 | |
Liabilities Subject to Compromise, Total | 4,516 | $ 0 |
2017 Credit Agreement | ||
Debt instrument | ||
Liabilities subject to compromise gross | 1,300 | |
2016 Credit Agreement | ||
Debt instrument | ||
Liabilities subject to compromise gross | 1,000 | |
Second Lien Notes | ||
Debt instrument | ||
Liabilities subject to compromise gross | 1,808 | |
Senior Notes (Unsecured) | 5.5% Senior Notes due 2021 | ||
Debt instrument | ||
Liabilities subject to compromise gross | $ 100 | |
Debt instrument, interest rate, stated percentage | 5.50% | |
Senior Notes (Unsecured) | 6% Senior Notes due 2024 | ||
Debt instrument | ||
Liabilities subject to compromise gross | $ 144 | |
Debt instrument, interest rate, stated percentage | 6.00% |
BASIS OF PRESENTATION - Reorgan
BASIS OF PRESENTATION - Reorganization Items – Related to our Chapter 11 Cases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Unamortized deferred gain and issuance costs, net | $ 125 | $ 125 | ||
Legal, professional and other, net | (34) | (34) | ||
Debtor-in-possession financing costs | (25) | (25) | ||
Total reorganization items, net | $ 66 | $ 0 | 66 | $ 0 |
Legal, professional and other, net non-cash items included in changes in operating assets and liabilities, net | $ 27 |
OTHER INFORMATION (Details)
OTHER INFORMATION (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Other Information [Line Items] | |||
Cash restricted for capital investments and distributions to a joint venture (JV) partner | $ 24,000,000 | $ 3,000,000 | |
Other Current Assets | |||
Amounts due from joint interest partners, net | 41,000,000 | 70,000,000 | |
Derivative assets | 17,000,000 | 39,000,000 | |
Prepaid expenses | 24,000,000 | 19,000,000 | |
Other | 0 | 2,000,000 | |
Other current assets, net | 82,000,000 | 130,000,000 | |
Allowance for credit loss | 19,000,000 | 19,000,000 | |
Accrued Liabilities | |||
Accrued employee-related costs | 81,000,000 | 116,000,000 | |
Accrued taxes other than on income | 64,000,000 | 57,000,000 | |
Accrued interest | 1,000,000 | 13,000,000 | |
Lease liability | 11,000,000 | 28,000,000 | |
Asset retirement obligations | 28,000,000 | 28,000,000 | |
Other | 55,000,000 | 71,000,000 | |
Accrued liabilities | 240,000,000 | 313,000,000 | |
Decrease in accrued employee-related costs | (35,000,000) | ||
Decrease in other accrued liabilities | (16,000,000) | ||
Taxes paid | 0 | $ 0 | |
Interest paid, net of capitalized amounts | 72,000,000 | $ 290,000,000 | |
Cash paid for reorganization items | 7,000,000 | ||
Settlement agreement with joint venture | 138,000,000 | ||
Total derivatives | |||
Accrued Liabilities | |||
Non-current asset retirement obligation | $ 507,000,000 | $ 489,000,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Materials and supplies | $ 58 | $ 64 |
Finished goods | 3 | 3 |
Total | $ 61 | $ 67 |
DEBT - Schedule of Short-term D
DEBT - Schedule of Short-term Debt (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt instrument | ||
Current portion of long-term debt | $ 0 | $ 100 |
Total short-term borrowings and current maturities | 733 | 100 |
Senior DIP Facility | Line of Credit | ||
Debt instrument | ||
Short-term borrowings | 83 | 0 |
Junior DIP Facility | Line of Credit | ||
Debt instrument | ||
Short-term borrowings | $ 650 | $ 0 |
LIBOR | Senior DIP Facility | Line of Credit | ||
Debt instrument | ||
Interest rate added to variable rate basis | 4.50% | |
LIBOR | Junior DIP Facility | Line of Credit | ||
Debt instrument | ||
Interest rate added to variable rate basis | 9.00% | |
Alternative Base Rate | Senior DIP Facility | Line of Credit | ||
Debt instrument | ||
Interest rate added to variable rate basis | 3.50% | |
Alternative Base Rate | Junior DIP Facility | Line of Credit | ||
Debt instrument | ||
Interest rate added to variable rate basis | 8.00% |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt | ||
Outstanding long-term debt | $ 4,352 | $ 4,977 |
Less: Current portion of long-term debt | 0 | (100) |
Less: Amounts reclassified to LSTC | (4,352) | 0 |
Total long-term debt | 0 | 4,877 |
Line of Credit | Revolving Credit Facility | ||
Debt | ||
Outstanding long-term debt | 0 | 518 |
Line of Credit | 2017 Credit Agreement | ||
Debt | ||
Outstanding long-term debt | 1,300 | 1,300 |
Line of Credit | 2016 Credit Agreement | ||
Debt | ||
Outstanding long-term debt | $ 1,000 | 1,000 |
Line of Credit | LIBOR | 2017 Credit Agreement | ||
Debt | ||
Interest rate added to variable rate basis | 4.75% | |
Line of Credit | LIBOR | 2016 Credit Agreement | ||
Debt | ||
Interest rate added to variable rate basis | 10.375% | |
Line of Credit | LIBOR | Minimum | Revolving Credit Facility | ||
Debt | ||
Interest rate added to variable rate basis | 3.25% | |
Line of Credit | LIBOR | Maximum | Revolving Credit Facility | ||
Debt | ||
Interest rate added to variable rate basis | 4.00% | |
Line of Credit | Alternative Base Rate | 2017 Credit Agreement | ||
Debt | ||
Interest rate added to variable rate basis | 3.75% | |
Line of Credit | Alternative Base Rate | 2016 Credit Agreement | ||
Debt | ||
Interest rate added to variable rate basis | 9.375% | |
Line of Credit | Alternative Base Rate | Minimum | Revolving Credit Facility | ||
Debt | ||
Interest rate added to variable rate basis | 2.25% | |
Line of Credit | Alternative Base Rate | Maximum | Revolving Credit Facility | ||
Debt | ||
Interest rate added to variable rate basis | 3.00% | |
Second Lien Notes | Lien Notes | ||
Debt | ||
Outstanding long-term debt | $ 1,808 | 1,815 |
Debt instrument, interest rate, stated percentage | 8.00% | |
5% Senior Notes due 2020 | Senior Notes (Unsecured) | ||
Debt | ||
Outstanding long-term debt | $ 0 | 100 |
Debt instrument, interest rate, stated percentage | 5.00% | |
5.5% Senior Notes due 2021 | Senior Notes (Unsecured) | ||
Debt | ||
Outstanding long-term debt | $ 100 | 100 |
Debt instrument, interest rate, stated percentage | 5.50% | |
6% Senior Notes due 2024 | Senior Notes (Unsecured) | ||
Debt | ||
Outstanding long-term debt | $ 144 | $ 144 |
Debt instrument, interest rate, stated percentage | 6.00% |
DEBT - Additional Details (Deta
DEBT - Additional Details (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt instrument | ||
Write off of deferred debt issuance cost | $ 125 | |
Deferred Gain (Loss) and Issuance Costs, Net | $ 146 | |
Debt Instrument Unamortized Premium On Exchange Of Debt | 211 | |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (65) | |
Senior Secured Superpriority DIP Credit Agreement | Senior DIP Facility | ||
Debt instrument | ||
Aggregate letters of credit issued | 151 | |
Revolving Credit Facility | Letters of Credit | ||
Debt instrument | ||
Aggregate letters of credit issued | $ 165 |
DEBT - Note Repurchases (Detail
DEBT - Note Repurchases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Repurchases of debt | ||||
Pre-tax gain on extinguishment of debt, net of a reduction in deferred issuance costs | $ 0 | $ 82 | $ 5 | $ 108 |
Second Lien Notes | ||||
Repurchases of debt | ||||
Debt instrument, repurchased face amount | 7 | 229 | ||
Repurchase value of the principal amounts | 3 | 149 | ||
Pre-tax gain on extinguishment of debt, net of a reduction in deferred issuance costs | $ 5 | $ 108 |
DEBT - Missed Interest Payments
DEBT - Missed Interest Payments and Forbearance (Details) - USD ($) $ in Millions | Jun. 15, 2020 | May 15, 2020 | May 29, 2020 |
Debt instrument | |||
Grace period | 30 days | 30 days | |
Senior Notes (Unsecured) | 6% Senior Notes due 2024 | |||
Debt instrument | |||
Interest not paid | $ 4 | ||
Shared First Priority Lien | |||
Debt instrument | |||
Interest not paid | $ 51 | ||
Second Lien Notes | |||
Debt instrument | |||
Interest not paid | $ 72 |
DEBT - Commencement of Bankrupt
DEBT - Commencement of Bankruptcy Proceedings (Details) | Sep. 30, 2020 |
5% Senior Notes due 2020 | Senior Notes (Unsecured) | |
Debt instrument | |
Debt instrument, interest rate, stated percentage | 5.00% |
5.5% Senior Notes due 2021 | Senior Notes (Unsecured) | |
Debt instrument | |
Debt instrument, interest rate, stated percentage | 5.50% |
6% Senior Notes due 2024 | Senior Notes (Unsecured) | |
Debt instrument | |
Debt instrument, interest rate, stated percentage | 6.00% |
Second Lien Notes | Lien Notes | |
Debt instrument | |
Debt instrument, interest rate, stated percentage | 8.00% |
DEBT - Debtor-in-Possession Cre
DEBT - Debtor-in-Possession Credit Agreements (Details) - USD ($) | Oct. 27, 2020 | Sep. 30, 2020 | Jul. 23, 2020 |
Subscription Rights | Subsequent Event | |||
Debt instrument | |||
Proceeds from common stock issued | $ 450,000,000 | ||
Senior DIP Facility | Line of Credit | |||
Debt instrument | |||
Debtor-in-possession financing, amount arranged | $ 483,000,000 | ||
Upfront fees on commitment | 1.00% | ||
Commitment fees | 0.50% | ||
Senior DIP Facility | Line of Credit | Revolving Credit Facility | |||
Debt instrument | |||
Debtor-in-possession financing, amount arranged | 250,000,000 | ||
Senior DIP Facility | Line of Credit | Letters of Credit | |||
Debt instrument | |||
Debtor-in-possession financing, amount arranged | 150,000,000 | ||
Senior DIP Facility | Line of Credit | Term Loan | |||
Debt instrument | |||
Debtor-in-possession financing, amount arranged | 83,000,000 | ||
Senior DIP Facility | Line of Credit | Additional Letters Of Credit | |||
Debt instrument | |||
Debtor-in-possession financing, amount arranged | 35,000,000 | ||
Senior DIP Facility | LIBOR | Line of Credit | |||
Debt instrument | |||
Basis spread on variable rate | 4.50% | ||
Senior DIP Facility | Alternative Base Rate | Line of Credit | |||
Debt instrument | |||
Basis spread on variable rate | 3.50% | ||
Junior DIP Facility | Line of Credit | |||
Debt instrument | |||
Debtor-in-possession financing, amount arranged | $ 650,000,000 | ||
Upfront fees on commitment | 1.00% | ||
Junior DIP Facility | LIBOR | Line of Credit | |||
Debt instrument | |||
Basis spread on variable rate | 9.00% | ||
Junior DIP Facility | Alternative Base Rate | Line of Credit | |||
Debt instrument | |||
Basis spread on variable rate | 8.00% | ||
Senior DIP And Junior DIP Credit Agreements | Line of Credit | |||
Debt instrument | |||
Percentage of debt hedged by price risk derivatives | 25.00% | ||
Line of credit minimum liquidity over rolling amount | $ 50,000,000 | ||
Line of credit minimum liquidity over amount | $ 35,000,000 | ||
Second Lien Notes | Lien Notes | Subsequent Event | |||
Debt instrument | |||
Proceeds from debt | $ 200,000,000 |
DEBT - Revolving Credit Facilit
DEBT - Revolving Credit Facility (Details) - USD ($) | Oct. 27, 2020 | Sep. 30, 2020 |
Crude Oil Hedge Positions | ||
Debt instrument | ||
Derivative, allocation percent | 25.00% | |
Revolving Credit Facility | Line of Credit | LIBOR | Minimum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 3.25% | |
Revolving Credit Facility | Line of Credit | LIBOR | Maximum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 4.00% | |
Revolving Credit Facility | Line of Credit | Alternative Base Rate | Minimum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 2.25% | |
Revolving Credit Facility | Line of Credit | Alternative Base Rate | Maximum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 3.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | ||
Debt instrument | ||
Line of credit facility, maximum borrowing capacity | $ 540,000,000 | |
Proceeds from long-term lines of credit | 225,000,000 | |
Unrestricted cash | $ 72,000,000 | |
Margin increase, percentage | 0.25% | |
Margin increase, additional percentage | 0.25% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | |
Debt instrument, term | 42 months | |
Line of current borrowing capacity | $ 1,200,000,000 | |
Financial covenant minimum month end liquidity | 200,000,000 | |
Financial covenant, liquidity threshold | 290,000,000 | |
Financial covenant, increase in commitment threshold | $ 60,000,000 | |
Revolving Credit Facility | Line of Credit | Subsequent Event | All Types Of Hedges | ||
Debt instrument | ||
Derivative, allocation percent | 25.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | First 24 Months | ||
Debt instrument | ||
Derivative, hedging percent | 50.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | First 24 Months | Crude Oil Hedge Positions | ||
Debt instrument | ||
Derivative, allocation percent | 75.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | Month 25 Through Month 36 | Crude Oil Hedge Positions | ||
Debt instrument | ||
Derivative, allocation percent | 50.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | 48 Month Period | ||
Debt instrument | ||
Derivative, hedging percent | 80.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | LIBOR | ||
Debt instrument | ||
Interest rate floor | 1.00% | |
Interest rate added to variable rate basis | 1.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | Alternative Base Rate | ||
Debt instrument | ||
Interest rate floor | 2.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | Federal Funds Rate | ||
Debt instrument | ||
Interest rate added to variable rate basis | 0.50% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | LIBOR Applicable Margin | Minimum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 3.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | LIBOR Applicable Margin | Maximum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 4.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | ABR Applicable Margin | Minimum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 2.00% | |
Revolving Credit Facility | Line of Credit | Subsequent Event | ABR Applicable Margin | Maximum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 3.00% | |
Revolving Credit Facility | Letters of Credit | Subsequent Event | ||
Debt instrument | ||
Proceeds from long-term lines of credit | $ 118,000,000 | |
Letters of Credit | Line of Credit | Subsequent Event | ||
Debt instrument | ||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 |
DEBT - Schedule of Financial Co
DEBT - Schedule of Financial Covenants (Details) - Line of Credit - Subsequent Event | Oct. 27, 2020 |
Second Lien Notes | |
Debt instrument | |
Consolidated Total Net Leverage Ratio | 3.45 |
Current Ratio | 0.85 |
After December 31, 2021 | Second Lien Notes | |
Debt instrument | |
Consolidated Total Net Leverage Ratio | 2.875 |
Revolving Credit Facility | |
Debt instrument | |
Consolidated Total Net Leverage Ratio | 3 |
Current Ratio | 1 |
Revolving Credit Facility | After December 31, 2021 | |
Debt instrument | |
Consolidated Total Net Leverage Ratio | 2.50 |
DEBT - Second Lien Notes (Detai
DEBT - Second Lien Notes (Details) - USD ($) | Oct. 27, 2020 | Sep. 30, 2020 |
Crude Oil Hedge Positions | ||
Debt instrument | ||
Derivative, allocation percent | 25.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | ||
Debt instrument | ||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | |
Debt instrument, term | 5 years | |
Financial covenant minimum month end liquidity | $ 170,000,000 | |
Financial covenant, liquidity threshold | 247,000,000 | |
Financial covenant, increase in commitment threshold | $ 51,000,000 | |
Second Lien Notes | Line of Credit | Subsequent Event | All Types Of Hedges | ||
Debt instrument | ||
Derivative, allocation percent | 25.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | First 24 Months | Crude Oil Hedge Positions | ||
Debt instrument | ||
Derivative, allocation percent | 75.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | Month 25 Through Month 36 | Crude Oil Hedge Positions | ||
Debt instrument | ||
Derivative, allocation percent | 50.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | Prior to 90 Days | ||
Debt instrument | ||
Redemption price, percent | 100.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | After 90 Days, Before First Anniversary Date | ||
Debt instrument | ||
Redemption price, percent | 105.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | After the First Anniversary Date, Before Second Anniversary Date | ||
Debt instrument | ||
Redemption price, percent | 103.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | After the Second Anniversary Date, Before Third Anniversary Date | ||
Debt instrument | ||
Redemption price, percent | 102.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | After the Third Anniversary Date, Before Fourth Anniversary Date | ||
Debt instrument | ||
Redemption price, percent | 101.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | Fifth Year | ||
Debt instrument | ||
Redemption price, percent | 100.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | Minimum | First 24 Months | ||
Debt instrument | ||
Derivative, hedging percent | 50.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | Maximum | 48 Month Period | ||
Debt instrument | ||
Derivative, hedging percent | 80.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | LIBOR | ||
Debt instrument | ||
Interest rate floor | 1.00% | |
Interest rate added to variable rate basis | 1.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | Alternative Base Rate | ||
Debt instrument | ||
Interest rate floor | 2.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | Federal Funds Rate | ||
Debt instrument | ||
Interest rate added to variable rate basis | 0.50% | |
Second Lien Notes | Line of Credit | Subsequent Event | LIBOR Applicable Margin | After Second Anniversary | ||
Debt instrument | ||
Interest rate added to variable rate basis | 9.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | LIBOR Applicable Margin | Minimum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 9.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | LIBOR Applicable Margin | Minimum | Prior to Second Anniversary | ||
Debt instrument | ||
Interest rate added to variable rate basis | 9.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | LIBOR Applicable Margin | Maximum | ||
Debt instrument | ||
Interest rate added to variable rate basis | 10.50% | |
Second Lien Notes | Line of Credit | Subsequent Event | LIBOR Applicable Margin | Maximum | Prior to Second Anniversary | ||
Debt instrument | ||
Interest rate added to variable rate basis | 10.50% | |
Second Lien Notes | Line of Credit | Subsequent Event | ABR Applicable Margin | After Second Anniversary | ||
Debt instrument | ||
Interest rate added to variable rate basis | 8.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | ABR Applicable Margin | Minimum | Prior to Second Anniversary | ||
Debt instrument | ||
Interest rate added to variable rate basis | 8.00% | |
Second Lien Notes | Line of Credit | Subsequent Event | ABR Applicable Margin | Maximum | Prior to Second Anniversary | ||
Debt instrument | ||
Interest rate added to variable rate basis | 9.50% |
DEBT - EHP Notes (Details)
DEBT - EHP Notes (Details) - EHP Notes - Senior Notes (Unsecured) - Subsequent Event | Oct. 27, 2020USD ($) |
Debt instrument | |
Debt instrument face amount | $ 300,000,000 |
Through Fourth Anniversary | |
Debt instrument | |
Debt instrument, interest rate, stated percentage | 6.00% |
After Fourth Anniversary | |
Debt instrument | |
Debt instrument, interest rate, stated percentage | 7.00% |
After Fifth Anniversary | |
Debt instrument | |
Debt instrument, interest rate, stated percentage | 8.00% |
DEBT - Fair Value (Details)
DEBT - Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | May 31, 2015 |
Debt instrument | |||
Debt carrying value | $ 6,800 | ||
Level 2 | |||
Debt instrument | |||
Estimated fair value of short-term debt | $ 733 | ||
Estimated fair value of long-term debt | 500 | ||
Debt carrying value | $ 4,400 | ||
Level 1 | |||
Debt instrument | |||
Estimated fair value of long-term debt | $ 3,800 | ||
Debt carrying value | $ 5,000 |
JOINT VENTURES - Changes in Non
JOINT VENTURES - Changes in Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |||
Equity Attributable to Noncontrolling Interest | ||||||
Beginning balance | $ (2,376) | [1] | $ (279) | $ (296) | [1] | $ (247) |
Net income (loss) attributable to noncontrolling interests | 3 | (3) | (12) | 2 | ||
Contributions from noncontrolling interest holders, net | 49 | |||||
Ending balance | (2,273) | [1] | (208) | (2,273) | [1] | (208) |
Equity Attributable to Noncontrolling Interest | ||||||
Equity Attributable to Noncontrolling Interest | ||||||
Beginning balance | 76 | [1] | 129 | 93 | [1] | 114 |
Net income (loss) attributable to noncontrolling interests | 12 | (2) | ||||
Return from noncontrolling interest | 0 | |||||
Contributions from noncontrolling interest holders, net | 0 | 49 | ||||
Distributions to noncontrolling interest holders | (37) | (61) | ||||
Ending balance | 68 | [1] | 100 | 68 | [1] | 100 |
Equity Attributable to Noncontrolling Interest | Ares JV | ||||||
Equity Attributable to Noncontrolling Interest | ||||||
Beginning balance | 0 | 15 | ||||
Net income (loss) attributable to noncontrolling interests | 3 | (9) | ||||
Return from noncontrolling interest | 0 | |||||
Contributions from noncontrolling interest holders, net | 0 | 0 | ||||
Distributions to noncontrolling interest holders | (3) | (6) | ||||
Ending balance | 0 | 0 | 0 | 0 | ||
Equity Attributable to Noncontrolling Interest | BSP JV | ||||||
Equity Attributable to Noncontrolling Interest | ||||||
Beginning balance | 93 | 99 | ||||
Net income (loss) attributable to noncontrolling interests | 9 | 7 | ||||
Return from noncontrolling interest | 0 | |||||
Contributions from noncontrolling interest holders, net | 0 | 49 | ||||
Distributions to noncontrolling interest holders | (34) | (55) | ||||
Ending balance | $ 68 | $ 100 | $ 68 | $ 100 | ||
[1] | The above tables exclude amounts related to redeemable noncontrolling interests reported in mezzanine equity. See Note 7 Joint Ventures for more information about our noncontrolling interests and a settlement agreement entered into with one of our noncontrolling interest holders in the third quarter of 2020 where the modification of terms was treated as a return from noncontrolling interest holders. |
JOINT VENTURES - Mezzanine Equi
JOINT VENTURES - Mezzanine Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |||
Mezzanine Equity - Redeemable Noncontrolling Interests | ||||||
Beginning balance | $ 802 | |||||
Net income (loss) attributable to noncontrolling interests | $ (25) | $ (30) | (85) | $ (87) | ||
Return from noncontrolling interest | (138) | (138) | ||||
Distributions to noncontrolling interest holders | (5) | [1] | (32) | (37) | [1] | (61) |
Ending balance | 692 | 692 | ||||
Mezzanine Equity - Redeemable Noncontrolling Interests | ||||||
Mezzanine Equity - Redeemable Noncontrolling Interests | ||||||
Beginning balance | 802 | 756 | ||||
Net income (loss) attributable to noncontrolling interests | 85 | 87 | ||||
Return from noncontrolling interest | (138) | |||||
Contributions from noncontrolling interest holders, net | 1 | 0 | ||||
Distributions to noncontrolling interest holders | (58) | (54) | ||||
Ending balance | 692 | 789 | 692 | 789 | ||
Mezzanine Equity - Redeemable Noncontrolling Interests | Ares JV | ||||||
Mezzanine Equity - Redeemable Noncontrolling Interests | ||||||
Beginning balance | 802 | 756 | ||||
Net income (loss) attributable to noncontrolling interests | 86 | 87 | ||||
Return from noncontrolling interest | (138) | |||||
Contributions from noncontrolling interest holders, net | 0 | 0 | ||||
Distributions to noncontrolling interest holders | (58) | (54) | ||||
Ending balance | 692 | 789 | 692 | 789 | ||
Mezzanine Equity - Redeemable Noncontrolling Interests | Elk Hills Carbon JV | ||||||
Mezzanine Equity - Redeemable Noncontrolling Interests | ||||||
Beginning balance | 0 | 0 | ||||
Net income (loss) attributable to noncontrolling interests | (1) | 0 | ||||
Return from noncontrolling interest | 0 | |||||
Contributions from noncontrolling interest holders, net | 1 | 0 | ||||
Distributions to noncontrolling interest holders | 0 | 0 | ||||
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 | ||
[1] | The above tables exclude amounts related to redeemable noncontrolling interests reported in mezzanine equity. See Note 7 Joint Ventures for more information about our noncontrolling interests and a settlement agreement entered into with one of our noncontrolling interest holders in the third quarter of 2020 where the modification of terms was treated as a return from noncontrolling interest holders. |
JOINT VENTURES - Ares (Details)
JOINT VENTURES - Ares (Details) | Oct. 27, 2020USD ($) | Sep. 30, 2020USD ($)plant |
Business Acquisition [Line Items] | ||
Number of plants | plant | 2 | |
Redeemable noncontrolling interest, equity, preferred, redemption value | $ 138,000,000 | |
EHP Notes | Subsequent Event | ||
Business Acquisition [Line Items] | ||
Cash acquired | $ 2,500,000 | |
Percentage of common acquired | 20.80% | |
EHP Notes | Subsequent Event | Senior Notes (Unsecured) | ||
Business Acquisition [Line Items] | ||
Debt instrument face amount | $ 300,000,000 | |
Maximum | ||
Business Acquisition [Line Items] | ||
Preferred stock, dividend rate, percentage | 13.50% | |
Minimum | ||
Business Acquisition [Line Items] | ||
Preferred stock, dividend rate, percentage | 9.50% | |
Preferred Class B | ||
Business Acquisition [Line Items] | ||
Preferred stock, liquidation preference, value | $ 835,000,000 | |
Ares JV | Common Class A | ||
Business Acquisition [Line Items] | ||
Percentage of common interest held by CRC | 50.00% | |
Ares JV | Common Class C | ||
Business Acquisition [Line Items] | ||
Percentage of common interest held by CRC | 95.25% | |
Ares JV | ECR | Common Class A | ||
Business Acquisition [Line Items] | ||
Percentage of common interest held by ECR | 50.00% | |
Ares JV | ECR | Common Class C | ||
Business Acquisition [Line Items] | ||
Percentage of common interest held by ECR | 4.75% | |
Ares JV | ECR | Series B Preferred Stock | ||
Business Acquisition [Line Items] | ||
Percentage of common interest held by ECR | 100.00% |
JOINT VENTURES - Elk Hills Carb
JOINT VENTURES - Elk Hills Carbon (Details) $ in Millions | 1 Months Ended |
Jan. 31, 2020USD ($) | |
OGCI | Elk Hills Carbon JV | |
Business Acquisition [Line Items] | |
Partnership contribution | $ 2 |
JOINT VENTURES - Other (Details
JOINT VENTURES - Other (Details) $ in Millions | 1 Months Ended |
Jul. 31, 2019USD ($)consecutive_daywell$ / barrel | |
Business Acquisition [Line Items] | |
Oil and natural gas, price per barrel | $ / barrel | 45 |
Number of trading days | consecutive_day | 30 |
Alpine JV | |
Business Acquisition [Line Items] | |
Initial investment commitment in joint venture | $ | $ 320 |
Initial investment commitment in joint venture, period | 3 years |
Number of wells to be drilled | well | 275 |
DERIVATIVES - Narrative (Detail
DERIVATIVES - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivatives | |||||
Net derivative gain (loss) from commodity contracts | $ 0 | $ 37,000,000 | $ 75,000,000 | $ (31,000,000) | |
Crude Oil Hedge Positions | |||||
Derivatives | |||||
Net derivative gain (loss) from commodity contracts | $ 63,000,000 | ||||
Derivative, allocation percent | 25.00% | 25.00% | |||
Interest-rate Contract | |||||
Derivatives | |||||
Derivative, amount of hedged item | $ 1,300,000,000 | $ 1,300,000,000 | |||
Gain (loss) from interest-rate risk | $ 0 | $ 0 | $ 4,000,000 | $ 4,000,000 | |
Interest-rate Contract | One month LIBOR | |||||
Derivatives | |||||
Interest rate to be in place to receive payment | 2.75% | 2.75% |
DERIVATIVES - Commodity Price R
DERIVATIVES - Commodity Price Risk (Details) | Sep. 30, 2020bbl$ / bbl |
Puts | Q4 2020 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 13,800 |
Weighted-average price (in dollars per barrel) | $ / bbl | 36.52 |
Puts | Q1 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 13,500 |
Weighted-average price (in dollars per barrel) | $ / bbl | 36.67 |
Puts | Q2 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 4,500 |
Weighted-average price (in dollars per barrel) | $ / bbl | 30 |
Puts | July 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 4,200 |
Weighted-average price (in dollars per barrel) | $ / bbl | 30 |
Swap | Q4 2020 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 6,400 |
Weighted-average price (in dollars per barrel) | $ / bbl | 44.75 |
Swap | Q1 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 6,000 |
Weighted-average price (in dollars per barrel) | $ / bbl | 44.75 |
Swap | Q2 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 6,000 |
Weighted-average price (in dollars per barrel) | $ / bbl | 44.75 |
Swap | July 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 5,600 |
Weighted-average price (in dollars per barrel) | $ / bbl | 44.75 |
Sold | Q4 2020 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 4,800 |
Weighted-average price (in dollars per barrel) | $ / bbl | 48.05 |
Sold | Q1 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 4,500 |
Weighted-average price (in dollars per barrel) | $ / bbl | 48.05 |
Sold | Q2 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 4,500 |
Weighted-average price (in dollars per barrel) | $ / bbl | 48.05 |
Sold | July 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 4,200 |
Weighted-average price (in dollars per barrel) | $ / bbl | 48.05 |
Purchased | Q4 2020 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 18,600 |
Weighted-average price (in dollars per barrel) | $ / bbl | 44.84 |
Purchased | Q1 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 18,000 |
Weighted-average price (in dollars per barrel) | $ / bbl | 45 |
Purchased | Q2 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 9,000 |
Weighted-average price (in dollars per barrel) | $ / bbl | 40 |
Purchased | July 2021 | |
Derivatives | |
Barrels per day (in Bbl) | bbl | 8,400 |
Weighted-average price (in dollars per barrel) | $ / bbl | 40 |
DERIVATIVES - Fair Value (Detai
DERIVATIVES - Fair Value (Details) - Commodity Contracts - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value of Derivatives | ||
Total derivatives | $ 0 | $ 0 |
Other current assets, net | ||
Fair Value of Derivatives | ||
Gross Amounts Offset in the Balance Sheet | (7) | (10) |
Other assets | ||
Fair Value of Derivatives | ||
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Accrued liabilities | ||
Fair Value of Derivatives | ||
Gross Amounts Offset in the Balance Sheet | 7 | 10 |
Gross Amounts Recognized at Fair Value | ||
Fair Value of Derivatives | ||
Total derivatives | 15 | 35 |
Gross Amounts Recognized at Fair Value | Other current assets, net | ||
Fair Value of Derivatives | ||
Gross Amounts Recognized at Fair Value | 24 | 49 |
Gross Amounts Recognized at Fair Value | Other assets | ||
Fair Value of Derivatives | ||
Gross Amounts Recognized at Fair Value | 0 | 1 |
Gross Amounts Recognized at Fair Value | Accrued liabilities | ||
Fair Value of Derivatives | ||
Gross Amounts Recognized at Fair Value | (9) | (15) |
Net Fair Value Presented in the Balance Sheet | ||
Fair Value of Derivatives | ||
Total derivatives | 15 | 35 |
Net Fair Value Presented in the Balance Sheet | Other current assets, net | ||
Fair Value of Derivatives | ||
Net Fair Value Presented in the Balance Sheet | 17 | 39 |
Net Fair Value Presented in the Balance Sheet | Other assets | ||
Fair Value of Derivatives | ||
Net Fair Value Presented in the Balance Sheet | 0 | 1 |
Net Fair Value Presented in the Balance Sheet | Accrued liabilities | ||
Fair Value of Derivatives | ||
Net Fair Value Presented in the Balance Sheet | $ (2) | $ (5) |
EARNINGS PER SHARE - Calculatio
EARNINGS PER SHARE - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basic EPS calculation | ||||
Net (loss) income | $ (7) | $ 127 | $ (1,999) | $ 124 |
Less: net income attributable to noncontrolling interests | (22) | (33) | (97) | (85) |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK | (29) | 94 | (2,096) | 39 |
Adjustments: | ||||
Net income allocated to participating securities | 0 | (1) | 0 | (1) |
Add: return from noncontrolling interest holders | 138 | 0 | 138 | 0 |
Net income (loss) available to common shares | $ 109 | $ 93 | $ (1,958) | $ 38 |
Weighted-average common shares outstanding — basic (in shares) | 49.5 | 49.1 | 49.4 | 48.9 |
Basic (in dollars per share) | $ 2.20 | $ 1.89 | $ (39.64) | $ 0.78 |
Diluted EPS calculation | ||||
Net (loss) income | $ (7) | $ 127 | $ (1,999) | $ 124 |
Less: net income attributable to noncontrolling interests | (22) | (33) | (97) | (85) |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK | (29) | 94 | (2,096) | 39 |
Adjustments: | ||||
Net income allocated to participating securities | 0 | (1) | 0 | (1) |
Add: return from noncontrolling interest holders | 138 | 0 | 138 | 0 |
Net income (loss) available to common shares | $ 109 | $ 93 | $ (1,958) | $ 38 |
Weighted-average common shares outstanding — basic (in shares) | 49.5 | 49.1 | 49.4 | 48.9 |
Dilutive effect of potentially dilutive securities (in shares) | 0 | 0.1 | 0 | 0.3 |
Weighted-average common shares outstanding — diluted (in shares) | 49.5 | 49.2 | 49.4 | 49.2 |
Diluted (in dollars per share) | $ 2.20 | $ 1.89 | $ (39.64) | $ 0.77 |
Weighted-average anti-dilutive shares | 3.3 | 3.2 | 4.4 | 2.3 |
PENSION AND POSTRETIREMENT BE_3
PENSION AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net periodic benefit costs: | ||||
Employer contributions to pension plan | $ 0 | $ 1,000,000 | $ 0 | $ 2,000,000 |
Contributions deferred till December 2020 | 5,000,000 | 5,000,000 | ||
Pension Benefit | ||||
Net periodic benefit costs: | ||||
Service cost | 0 | 0 | 1,000,000 | 1,000,000 |
Interest cost | 0 | 0 | 1,000,000 | 2,000,000 |
Expected return on plan assets | 0 | (1,000,000) | (1,000,000) | (2,000,000) |
Recognized actuarial loss | 0 | 1,000,000 | 1,000,000 | 1,000,000 |
Settlement loss | 0 | 0 | 0 | 1,000,000 |
Total | 0 | 0 | 2,000,000 | 3,000,000 |
Postretirement 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 | 0 | 0 | 0 | 0 |
Recognized actuarial loss | 0 | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 | 0 |
Total | $ 2,000,000 | $ 2,000,000 | $ 6,000,000 | $ 6,000,000 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of revenue | ||||
Oil and natural gas sales | $ 312 | $ 541 | $ 987 | $ 1,720 |
Revenue not from contract with customer | 97 | 103 | 196 | 335 |
Net derivative gain (loss) from commodity contracts | 0 | 37 | 75 | (31) |
Total revenues | 409 | 681 | 1,258 | 2,024 |
Oil | ||||
Disaggregation of revenue | ||||
Oil and natural gas sales | 246 | 457 | 795 | 1,433 |
Natural gas | ||||
Disaggregation of revenue | ||||
Oil and natural gas sales | 34 | 50 | 98 | 155 |
NGLs | ||||
Disaggregation of revenue | ||||
Oil and natural gas sales | 32 | 34 | 94 | 132 |
Electricity sales | ||||
Disaggregation of revenue | ||||
Revenue not from contract with customer | 43 | 38 | 75 | 88 |
Marketing and trading revenue | ||||
Disaggregation of revenue | ||||
Revenue not from contract with customer | 50 | 62 | 109 | 230 |
Other revenue | ||||
Disaggregation of revenue | ||||
Revenue not from contract with customer | $ 4 | $ 3 | $ 12 | $ 17 |
LEASES - Supplement balance she
LEASES - Supplement balance sheet information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020drilling_rig | Sep. 30, 2020USD ($)drilling_rig | Dec. 31, 2019USD ($) | |
Leases [Abstract] | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent | |
Operating lease, net | $ 43 | $ 59 | |
Finance lease, net | 1 | 2 | |
Total right-of-use assets | 44 | 61 | |
Operating lease | 10 | 27 | |
Finance lease | 1 | 1 | |
Operating lease | 31 | 37 | |
Finance lease | 0 | 1 | |
Total lease liabilities | $ 42 | $ 66 | |
Number of drilling rigs released | drilling_rig | 5 | ||
Number of drilling rigs remaining | drilling_rig | 2 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0.00% | 0.00% |
ASSET IMPAIRMENTS - Narrative (
ASSET IMPAIRMENTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |||||
Asset impairments | $ 0 | $ 1,700 | $ 0 | $ 1,736 | $ 0 |
ASSET IMPAIRMENTS (Details)
ASSET IMPAIRMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |||||
Proved oil and natural gas properties | $ 1,487 | ||||
Unproved properties | 228 | ||||
Other | 21 | ||||
Total | $ 0 | $ 1,700 | $ 0 | $ 1,736 | $ 0 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 27, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | |||
Additional shares issued under plan (in shares) | 0 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Outstanding common stock (in percent) | 1.00% | ||
Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 83,300,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Shares reserved for future issuance (in shares) | 4,400,000 | ||
Expected term (in years) | 4 years | ||
Subsequent Event | Ares JV | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 17,300,000 | ||
Subsequent Event | Pre-Petition Creditor Group | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 27,100,000 | ||
Subsequent Event | Junior DIP Facility | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 821,000 | ||
Subscription Rights | Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 34,600,000 | ||
Proceeds from common stock issued | $ 446 | ||
Payments for issuance fee | $ 4 | ||
Subscription Rights, Backstop Parties | Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 1,600,000 | ||
Subscription Rights, Excluding Backstop Parties | Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 33,000,000 | ||
Subscription Right, Backstop Commitment Agreement | Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
New common stock issued (in shares) | 3,500,000 | ||
Tier 1 Warrants | Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
Warrants exercisable (in percent) | 2.00% | ||
Tier 2 Warrants | Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
Warrants exercisable (in percent) | 3.00% | ||
Outstanding common stock (in percent) | 3.00% | ||
Investment warrants, exercise price (in dollars per share) | $ 36 |
CONDENSED COMBINED DEBTOR-IN-_3
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION - Condensed Consolidating Debtors' Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | [1] | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | ||
Assets [Abstract] | |||||||||
Total current assets | $ 420 | $ 491 | |||||||
Total property, plant and equipment, net | 4,360 | 6,352 | |||||||
Other assets | 76 | 115 | |||||||
TOTAL ASSETS | 4,856 | 6,958 | |||||||
Liabilities and Equity [Abstract] | |||||||||
Total current liabilities | 1,194 | 709 | |||||||
Other long-term liabilities | 727 | 720 | |||||||
Liabilities subject to compromise | 4,516 | 0 | |||||||
Total equity | (2,273) | [1] | $ (2,376) | (296) | [1] | $ (208) | $ (279) | $ (247) | |
TOTAL LIABILITIES AND EQUITY | 4,856 | $ 6,958 | |||||||
Parent Company And Subsidiaries In Debtor In Possession Financing | |||||||||
Assets [Abstract] | |||||||||
Total current assets | 379 | ||||||||
Investments in subsidiaries | (261) | ||||||||
Total property, plant and equipment, net | 3,937 | ||||||||
Other assets | 61 | ||||||||
TOTAL ASSETS | 4,116 | ||||||||
Liabilities and Equity [Abstract] | |||||||||
Total current liabilities | 1,217 | ||||||||
Other long-term liabilities | 724 | ||||||||
Liabilities subject to compromise | 4,516 | ||||||||
Total equity | (2,341) | ||||||||
TOTAL LIABILITIES AND EQUITY | $ 4,116 | ||||||||
[1] | The above tables exclude amounts related to redeemable noncontrolling interests reported in mezzanine equity. See Note 7 Joint Ventures for more information about our noncontrolling interests and a settlement agreement entered into with one of our noncontrolling interest holders in the third quarter of 2020 where the modification of terms was treated as a return from noncontrolling interest holders. |
CONDENSED COMBINED DEBTOR-IN-_4
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION - Condensed Consolidating Debtors' Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Income Statements, Captions [Line Items] | ||||
Total revenues | $ 409 | $ 681 | $ 1,258 | $ 2,024 |
Total costs | 422 | 533 | 3,035 | 1,697 |
(LOSS) INCOME BEFORE INCOME TAXES | (7) | $ 127 | $ (1,999) | $ 124 |
Parent Company And Subsidiaries In Debtor In Possession Financing | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Total revenues | 357 | |||
Total costs | 436 | |||
Non-operating income | 6 | |||
(LOSS) INCOME BEFORE INCOME TAXES | $ (73) |
CONDENSED COMBINED DEBTOR-IN-_5
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION - Condensed Consolidating Debtors' Statement of Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash used in operating activities | $ 141 | $ 540 |
Net cash used in investing activities | (28) | (291) |
Net cash provided by financing activities | (8) | (244) |
Increase in cash | 105 | 5 |
Cash—beginning of period | 17 | 17 |
Cash—end of period | 122 | $ 22 |
Parent Company And Subsidiaries In Debtor In Possession Financing | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash used in operating activities | (38) | |
Net cash used in investing activities | (1) | |
Net cash provided by financing activities | 31 | |
Increase in cash | (8) | |
Cash—beginning of period | 105 | |
Cash—end of period | $ 97 |