Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2015shares | |
Document and Entity Information | |
Entity Registrant Name | California Resources Corp |
Entity Central Index Key | 1,609,253 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 387,837,645 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q3 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4 | $ 14 |
Trade receivables, net | 217 | 308 |
Inventories | 73 | 71 |
Other current assets | 308 | 308 |
Total current assets | 602 | 701 |
PROPERTY, PLANT AND EQUIPMENT | 20,845 | 20,536 |
Accumulated depreciation, depletion and amortization | (9,588) | (8,851) |
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET | 11,257 | 11,685 |
OTHER ASSETS | 54 | 43 |
TOTAL ASSETS | 11,913 | 12,429 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 75 | |
Accounts payable | 280 | 588 |
Accrued liabilities | 393 | 334 |
Total current liabilities | 748 | 922 |
LONG-TERM DEBT, NET | 6,345 | 6,292 |
DEFERRED INCOME TAXES | 1,886 | 2,055 |
OTHER LONG-TERM LIABILITIES | $ 579 | $ 549 |
EQUITY | ||
Preferred stock (200 million shares authorized at $0.01 par value) no shares outstanding at September 30, 2015 and December 31, 2014 | ||
Common stock (2.0 billion shares authorized at $0.01 par value) outstanding shares (September 30, 2015 - 387,837,645 and December 31, 2014 - 385,639,582) | $ 4 | $ 4 |
Additional paid-in capital | 4,772 | 4,748 |
Accumulated deficit | (2,401) | (2,117) |
Accumulated other comprehensive income / (loss) | (20) | (24) |
Total equity | 2,355 | 2,611 |
TOTAL LIABILITIES AND EQUITY | $ 11,913 | $ 12,429 |
Consolidated Condensed Balance3
Consolidated Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Consolidated Condensed Balance Sheets | ||
Preferred stock, outstanding shares | 0 | 0 |
Preferred stock, authorized shares | 200,000,000 | 200,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 2,000,000,000 | 2,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares, Outstanding | 387,837,645 | 385,639,582 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES | ||||
Oil and natural gas net sales to third parties | $ 596 | $ 630 | $ 1,754 | $ 678 |
Oil and natural gas net sales to related parties | 421 | 2,560 | ||
Other revenue | 30 | 41 | 83 | 115 |
TOTAL REVENUES | 626 | 1,092 | 1,837 | 3,353 |
COSTS AND OTHER DEDUCTIONS | ||||
Production costs | 246 | 271 | 730 | 805 |
General and administrative expenses | 129 | 78 | 290 | 218 |
Depreciation, depletion and amortization | 253 | 304 | 757 | 886 |
Taxes other than on income | 42 | 56 | 150 | 163 |
Exploration expense | 5 | 25 | 29 | 71 |
Interest and debt expense, net | 82 | 244 | ||
Other expenses | 23 | 39 | 74 | 109 |
TOTAL COSTS AND OTHER DEDUCTIONS | 780 | 773 | 2,274 | 2,252 |
INCOME / (LOSS) BEFORE INCOME TAXES | (154) | 319 | (437) | 1,101 |
Income tax (expense) / benefit | 50 | (131) | 165 | (444) |
NET INCOME / (LOSS) | $ (104) | $ 188 | $ (272) | $ 657 |
Net income / (loss) per share of common stock | ||||
Basic (in dollars per share) | $ (0.27) | $ 0.48 | $ (0.71) | $ 1.69 |
Diluted (in dollars per share) | (0.27) | $ 0.48 | (0.71) | $ 1.69 |
Dividends per common share | $ 0.01 | $ 0.03 |
Consolidated Condensed Stateme5
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Consolidated Condensed Statements of Comprehensive Income | |||||
Net income / (loss) | $ (104) | $ 188 | $ (272) | $ 657 | |
Other comprehensive income / (loss) items: | |||||
Unrealized losses on derivatives | [1] | (2) | |||
Pension and postretirement (losses) / gains | [2] | (4) | (7) | 1 | |
Reclassification to income of realized losses on derivatives | [3] | 3 | |||
Reclassification to income of realized losses on pension and postretirement | [4] | 6 | 11 | ||
Other comprehensive income / (loss), net of tax | 2 | 4 | 2 | ||
Comprehensive income/(loss) | $ (102) | $ 188 | $ (268) | $ 659 | |
[1] | No tax for the three months ended September 30, 2015 and 2014. Net of tax of zero and $1 million for the nine months ended September 30, 2015 and 2014, respectively. | ||||
[2] | Net of tax of $3 million and zero for the three months ended September 30, 2015 and 2014, respectively. Net of tax of $5 million and zero for the nine months ended September 30, 2015 and 2014, respectively. See Note 10, Retirement and Postretirement Benefit Plans, for additional information. | ||||
[3] | No tax for the three months ended September 30, 2015 and 2014. Net of tax of zero and ($2) million for the nine months ended September 30, 2015 and 2014, respectively. | ||||
[4] | Net of tax of ($4) million and zero for the three months ended September 30, 2015 and 2014, respectively. Net of tax of ($7) million and zero for the nine months ended September 30, 2015 and 2014, respectively. See Note 10, Retirement and Postretirement Benefit Plans, for additional information. |
Consolidated Condensed Stateme6
Consolidated Condensed Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Condensed Statements of Comprehensive Income | ||||
Unrealized losses on derivatives, tax | $ 0 | $ 0 | $ 0 | $ 1 |
Pension and postretirement (losses) / gains, tax | 3 | 0 | 5 | 0 |
Reclassification to income of realized losses on derivatives, tax | 0 | 0 | 0 | (2) |
Reclassification to income of realized losses on pension and postretirement, tax | $ (4) | $ 0 | $ (7) | $ 0 |
Consolidated Condensed Stateme7
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net income / (loss) | $ (272) | $ 657 |
Adjustments to reconcile net income / (loss) to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 757 | 886 |
Deferred income tax expense / (benefit) | (165) | 262 |
Other noncash charges to income | 126 | 22 |
Dry hole expenses | 9 | 52 |
Changes in operating assets and liabilities, net | (43) | (12) |
Net cash provided by operating activities | 412 | 1,867 |
CASH FLOW FROM INVESTING ACTIVITIES | ||
Capital investments | (323) | (1,569) |
Changes in capital investment accruals | (202) | 24 |
Acquisitions and other | (17) | (69) |
Net cash used by investing activities | (542) | (1,614) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Proceeds from revolving credit facility | 1,345 | |
Repayments of revolving credit facility | (1,224) | |
Proceeds from issuance of common stock | 7 | |
Cash dividends paid | (8) | |
Distributions to Occidental, net | (148) | |
Net cash provided / (used) by financing activities | 120 | (148) |
Increase / (decrease) in cash and cash equivalents | (10) | 105 |
Cash and cash equivalents - beginning of period | 14 | |
Cash and cash equivalents - end of period | $ 4 | $ 105 |
THE SPIN-OFF AND SUMMARY OF SIG
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Separation and Spin-off We are an independent oil and natural gas exploration and production company operating properties exclusively within the State of California. We were incorporated in Delaware as a wholly-owned subsidiary of Occidental Petroleum Corporation (Occidental) on April 23, 2014, and remained a wholly-owned subsidiary of Occidental until November 30, 2014. Prior to November 30, 2014, all material existing assets, operations and liabilities of the California business were consolidated under us. On November 30, 2014, Occidental distributed shares of our common stock on a pro rata basis to Occidental stockholders and we became an independent, publicly traded company (the Spin-off). Occidental retained approximately 18.5% of our outstanding shares of common stock, which it has stated it intends to divest within 18 months of the Spin-off. Except when the context otherwise requires or where otherwise indicated, (1) all references to CRC, the Company, we, us and our refer to California Resources Corporation and its subsidiaries or the California business, (2) all references to the California business refer to Occidental’s California oil and gas exploration and production operations and related assets, liabilities and obligations, which we assumed in connection with the Spin-off, and (3) all references to Occidental refer to Occidental Petroleum Corporation, our former parent, and its subsidiaries. Basis of Presentation Until the Spin-off, the accompanying financial statements were derived from the consolidated financial statements and accounting records of Occidental and were presented on a combined basis for the pre-Spin-off periods. These financial statements reflect the historical results of operations, financial position and cash flows of the California business. We account for our share of oil and gas exploration and production ventures, in which we have a direct working interest, by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on the balance sheets and statements of income and cash flows. The statements of income for periods prior to the Spin-off included expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. These allocations were based primarily on specific identification of time or activities associated with us, employee headcount or our relative size compared to Occidental. Our management believes the assumptions underlying the financial statements, including the assumptions regarding allocating expenses from Occidental, are reasonable. However, the financial statements for the pre-Spin-off periods may not include all of the actual expenses that would have been incurred, may include duplicative costs and may not reflect our results of operations, financial position and cash flows had we operated as a stand-alone public company during the periods presented. Actual costs that would have been incurred if we had been a stand-alone company prior to the Spin-off would have depended on multiple factors, including organizational structure and strategic and operating decisions. The assets and liabilities in the pre-Spin-off financial statements are presented on a historical cost basis. We have eliminated all of our significant intercompany transactions and accounts. Prior to the Spin-off, we participated in Occidental’s centralized treasury management program and had not incurred any debt. Excess cash generated by our business was distributed to Occidental, and likewise our cash needs were provided by Occidental, in the form of contributions. All financial information presented after the Spin-off represents our financial position, results of operations and cash flows, as follows: " Our consolidated statements of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2015, as applicable, consist of our stand-alone consolidated results following the Spin-off, and the three and nine months ended September 30, 2014 consist of the combined results of the California business. " Our consolidated balance sheets at September 30, 2015 and December 31, 2014 consist of our consolidated balances. In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2015, and the statements of operations, comprehensive income, and cash flows for the three and nine months ended September 30, 2015 and 2014, as applicable. The income / (loss) and cash flows for the periods ended September 30, 2015 and 2014 are not necessarily indicative of the income / (loss) or cash flows you should expect for the full year. Certain prior year amounts have been reclassified to conform to the 2015 presentation. In the second quarter of 2015, we changed the classification of certain employee-related costs from general and administrative expenses to production costs to better align these costs with the functions performed by those employees. Prior period amounts have been changed to conform to the current year classification. We have prepared this report pursuant to the rules and regulations of the United States Securities and Exchange Commission applicable to interim financial information, which permit omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. You should read this Form 10-Q in conjunction with the consolidated and combined financial statements and the notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2014. |
ACCOUNTING AND DISCLOSURE CHANG
ACCOUNTING AND DISCLOSURE CHANGES | 9 Months Ended |
Sep. 30, 2015 | |
ACCOUNTING AND DISCLOSURE CHANGES | |
ACCOUNTING AND DISCLOSURE CHANGES | NOTE 2 ACCOUNTING AND DISCLOSURE CHANGES In July 2015, the Financial Accounting Standards Board (FASB) issued rules requiring entities to measure inventory within the scope of these rules at the lower of cost and net realizable value. These new rules will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and must be applied prospectively with earlier application permitted. We do not expect these new rules to have a significant impact on our financial statements. In May 2015, the FASB issued rules to remove the requirements to categorize within the fair value hierarchy all investments for which the fair value is measured using the net asset value (NAV) per share practical expedient. The new rules also limit disclosures to investments for which the entity has elected to measure the fair value using that practical expedient, rather than for all investments that are eligible to be measured at fair value using the NAV per share. These rules will be effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption of the rules permitted. We do not expect the disclosure changes to have a significant impact on our financial statements. In April 2015, the FASB issued rules to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. These rules will be effective for annual periods beginning after December 15, 2015 and interim periods within those fiscal years, with early adoption of the rules permitted for financial statements which have not been previously issued. We early adopted the new rule in the first quarter of 2015 and retrospectively reclassified unamortized debt issuance costs of $68 million at December 31, 2014. The amount was previously reflected in other assets. |
OTHER INFORMATION
OTHER INFORMATION | 9 Months Ended |
Sep. 30, 2015 | |
OTHER INFORMATION | |
OTHER INFORMATION | NOTE 3 OTHER INFORMATION Other current assets at September 30, 2015 and December 31, 2014, include amounts due from joint interest partners of approximately $110 million and $120 million, deferred tax assets of $55 million and $60 million, and greenhouse gas emission credits of $40 million and $65 million, respectively. Accrued liabilities at September 30, 2015 and December 31, 2014, include accrued compensation-related costs of approximately $130 million and $95 million, interest payable of $65 million and $70 million and greenhouse gas liabilities of $75 million and $65 million, respectively. Of the $130 million accrued compensation-related costs at September 30, 2015, $40 million relates to third quarter voluntary retirement and employee reduction charges. Other long-term liabilities include asset retirement obligations of $397 million each at September 30, 2015 and December 31, 2014. Other revenue and other expenses mainly comprise sales and the associated costs, respectively, of the portion of electricity generated by our power plant that is sold to third parties. Supplemental Cash Flow Information Prior to the Spin-off we did not make any United States federal and state income tax payments directly to taxing jurisdictions. During that period, our share of Occidental’s tax payments or refunds were paid or received, as applicable, by our former parent. We did not make any United States federal or state income tax payments during the nine-month period ended September 30, 2015. Interest paid totaled approximately $248 million and zero for the nine months ended September 30, 2015 and 2014, respectively. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2015 | |
INVENTORIES | |
INVENTORIES | NOTE 4 INVENTORIES Inventories as of September 30, 2015 and December 31, 2014, consisted of the following: 2015 2014 (in millions) Materials and supplies $ $ Finished goods Total $ $ |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2015 | |
DEBT | |
DEBT | NOTE 5 DEBT Debt as of September 30, 2015 and December 31, 2014, consisted of the following: 2015 2014 (in millions) Revolving Credit Facility $ $ Term Loan Facility 5% notes due 2020 5 1/2% notes due 2021 6% notes due 2024 Total debt Less: Current maturities of long-term debt — Less: Deferred financing costs Total long-term debt, net $ $ Credit Facilities We have a credit agreement with a syndicate of lenders that provides for (i) a five-year senior term loan facility (the Term Loan Facility) and (ii) a five-year senior revolving loan facility (the Revolving Credit Facility and, together with the Term Loan Facility, the Credit Facilities). All borrowings under these facilities are subject to certain customary conditions. During the third quarter of 2015, our corporate ratings from Moody’s Investors Service (Moody’s) and Standard & Poor’s Ratings Services (S&P) were downgraded to B1 and BB-, respectively, resulting in the imposition of a borrowing base and the requirement to grant security on a first-lien basis in our oil and gas reserves under our Credit Facilities. In addition, we amended the Credit Facilities effective as of November 2, 2015, to change certain of our financial and other covenants. The following describes the terms of our facilities after giving effect to this amendment. The aggregate commitments of the lenders are $2.0 billion under the Revolving Credit Facility and $1.0 billion under Term Loan Facility, respectively. The Revolving Credit Facility includes a sub-limit of $400 million for the issuance of letters of credit. We will be required to repay the Term Loan Facility in $25 million quarterly installments beginning on March 31, 2016. As of September 30, 2015, we had $481 million outstanding under our Revolving Credit Facility. Had the November 2, 2015 amendment been in place at September 30, 2015, we would have had borrowing availability of up to an additional $1,523 million, taking into account our cash balance at that time, subject to compliance with our quarterly financial covenants described below, which would have limited our ability to utilize the full amount. Borrowings under the Credit Facilities bear interest, at our election, at either a LIBOR rate or an alternate base rate (ABR) (equal to the greatest of (i) the administrative agent’s prime rate, (ii) the one-month LIBOR rate plus 1.00% and (iii) the federal funds effective rate plus 0.50%), in each case plus an applicable margin. This applicable margin is based on our borrowing base utilization or our most current leverage ratio and will vary from (a) in the case of LIBOR loans, 1.50% to 2.75% and (b) in the case of ABR loans, 0.50% to 1.75%. The unused portion of the Revolving Credit Facility is subject to a commitment fee equal to 0.50% per annum. We also pay customary fees and expenses under the Credit Facilities. 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. All obligations under the Credit Facilities are guaranteed jointly and severally by all of our wholly-owned material subsidiaries. The assets and liabilities of subsidiaries not guaranteeing the debt are de minimis. Our ability to borrow under the Credit Facilities is subject to a borrowing base. Our initial borrowing base was set at $3.0 billion and is subject to redetermination on or around January 15, 2016, and thereafter will be redetermined annually by our lenders each May, commencing May 1, 2016. Between scheduled borrowing base redeterminations, we and the lenders (requiring a request from the lenders holding 66 2/3 percent of our commitments), may each request one special redetermination. We will be permitted to have security released when both (i) our credit ratings are at least Baa3 from Moody’s and BBB- from S&P, in each case with a stable or better outlook, and (ii) certain permitted liens securing other debt are released. The Credit Facilities require us to apply 50% of the proceeds from certain transactions, including certain deleveraging transactions, to repay the Term Loan. We must also apply cash on hand in excess of $250 million to repay certain amounts outstanding under the Revolving Credit Facility. In addition, our ability to pay dividends or make other distributions to common stockholders is limited to $20 million per year. While we are subject to the borrowing base, the Credit Facilities require us to maintain the following financial covenants for the trailing twelve months ended as of the last day of each fiscal quarter: (a) a first lien senior secured leverage ratio of no more than 2.25 to 1.00 and (b) an interest expense ratio of no less than 2.00 to 1.00. At September 30, 2015, we were in compliance with the financial and other covenants under our Credit Facilities as they existed at that time. If we were to breach any of these covenants, our lenders would be permitted to accelerate the principal amount due under the facilities. If payment were accelerated it would result in a default under our notes described below. Senior Notes On October 1, 2014, we issued $5.00 billion in aggregate principal amount of our senior notes, including $1.00 billion of 5% senior notes due January 15, 2020 (the 2020 notes), $1.75 billion of 5 1/2% senior notes due September 15, 2021 (the 2021 notes) and $2.25 billion of 6% senior notes due November 15, 2024 (the 2024 notes and together with the 2020 notes and the 2021 notes, the notes). The notes were issued at par and are fully and unconditionally guaranteed on a senior unsecured basis by all of our material subsidiaries. We used the net proceeds from the notes to make a $4.95 billion cash distribution to Occidental in October 2014. We pay interest on the 2020 notes semi-annually in cash in arrears on January 15 and July 15 of each year, beginning on July 15, 2015. We pay interest on the 2021 notes semi-annually in cash in arrears on March 15 and September 15 of each year, beginning on March 15, 2015. We pay interest on the 2024 notes semi-annually in cash in arrears on May 15 and November 15 of each year, beginning on May 15, 2015. The indenture governing the notes includes covenants that, among other things, limit our and our restricted subsidiaries’ ability to incur debt secured by liens. These covenants also restrict our ability to merge or consolidate with, or transfer all or substantially all of our assets to, another entity. These covenants are subject to a number of important qualifications and limitations that are set forth in the indenture. The covenants are not, however, directly linked to measures of our financial performance. In addition, if we experience a change of control coupled with a credit rating decline below investment grade, we will be required to offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest or to have exercised our redemption right. We estimate the fair value of fixed-rate debt based on prices from known market transactions for our instruments. The estimated fair value of our debt at September 30, 2015 and December 31, 2014, the fixed rate portion of which was classified as Level 1, and the variable rate portion of which approximated fair value, was approximately $4.5 billion and $5.6 billion, respectively, compared to a net carrying value of approximately $6.4 billion and $6.3 billion, respectively. A one-eighth percent change in the variable interest rates on the borrowings under our Term Loan Facility and Revolving Credit Facility on September 30, 2015, would result in an approximately $2 million change in annual interest expense. As of September 30, 2015 and December 31, 2014, we had letters of credit in the aggregate amount of approximately $23 million and $25 million, respectively, that were issued to support ordinary course marketing and other matters. |
LAWSUITS, CLAIMS, COMMITMENTS A
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES | |
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES | NOTE 6 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, 2015 and December 31, 2014 were not material to our balance sheets as of such dates. We also evaluate the amount of reasonably possible losses that we could incur as a result of these matters. We believe that reasonably possible losses that we could incur in excess of reserves accrued on our balance sheet would not be material to our consolidated financial position or results of operations. We, our subsidiaries, or both, have indemnified various parties against specific liabilities those parties might incur in the future in connection with the Spin-off, purchases and other transactions that they have entered into with us. These indemnities include indemnities made to Occidental against certain tax-related liabilities that may be incurred by Occidental relating to the Spin-off and liabilities related to the operation of our business while it was still owned by Occidental. As of September 30, 2015, we are not aware of circumstances that we believe would reasonably be expected to lead to indemnity claims that would result in payments materially in excess of reserves. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2015 | |
DERIVATIVES | |
DERIVATIVES | NOTE 7 DERIVATIVES General From time to time, we use a variety of derivative instruments intended to establish, as of the date of production, the price we receive, to improve the effective realized prices for oil and gas, and to protect our capital program in case of price deterioration. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. We apply hedge accounting when transactions meet specified criteria for cash-flow hedge treatment and management elects and documents such treatment. Otherwise, we recognize any fair value gains or losses, over the remaining term of the hedge instrument, in earnings in the current period. We recognized approximately $53 million and $33 million of derivative gains from marking these contracts to market, which were included in net sales, for the three and nine months ended September 30, 2015, respectively. As of September 30, 2015, our existing hedge positions, the initial values of which were not material, were as follows: " Weighted average Brent-based floors and ceilings of $61.25 per barrel and $73.88 per barrel, respectively, for 40,000 barrels per day of our fourth quarter 2015 oil production; " Brent-based hedges with a floor of $55 per barrel and a ceiling of $70 per barrel for 12,500 barrels per day of our January through June 2016 crude oil production; " Brent-based hedges with a floor of $50 per barrel and a weighted average ceiling of $74.42 per barrel for 3,000 barrels per day of our July through December 2016 oil production; " Index-based hedges at an average price of $3.01 per million British thermal units (MMBtu) for 40,000 MMBtu per day and weighted average floors and ceilings of $2.80 per MMBtu and $3.17 per MMBtu, respectively, for 20,000 MMBtu per day of our fourth quarter 2015 natural gas production. These same hedges were also in place for our third quarter 2015 natural gas production. Subsequent to September 30, 2015, we entered into additional hedges for our first half 2016 crude oil production, bringing our first half 2016 hedging program to a total of 30,500 barrels per day with a weighted average floor of $52.38 per barrel and 35,500 barrels per day with a ceiling of $66.15 per barrel. The initial value of these hedges was not material. For our third quarter 2015 oil production, we had hedged 70,000 barrels per day at weighted average Brent-based floors of $52.14 per barrel and 30,000 barrels per day at Brent-based ceilings of $72.12 per barrel. The initial value of these hedges was not material. From January through June 2015 we had purchased options for 100,000 barrels of our crude oil production per day, at $50 per barrel Brent and sold options for 30,000 barrels per day for March through June 2015 at $75 per barrel Brent. The initial intrinsic and time values were deferred and subsequent changes were included in the net derivative losses reported in net sales. The initial intrinsic value, which was accounted for as a cash flow hedge, was insignificant. Going forward, we will continue to be strategic and opportunistic in implementing any hedging program. Our objective is to protect against the cyclical nature of commodity prices to provide a level of certainty around our cash flows and margins necessary to implement our capital investment program and protect our ability to comply with our credit facility covenants. For the first quarter of 2014 we had hedged 50 MMcf per day of our natural gas production, which qualified as cash-flow hedges. The weighted average strike price of these swaps was $4.30 per Mcf. The after-tax gains and losses recognized in, and reclassified to income from, Accumulated Other Comprehensive Income (AOCI) for derivative instruments classified as cash-flow hedges for the three- and nine-month periods ended September 30, 2015 and 2014, and the ending AOCI balances at those dates were not material. There were no fair value hedges as of and during the three- and nine-month periods ended September 30, 2015 and 2014. Fair Value of Derivatives Our commodity derivatives are measured at fair value with the changes recognized in the statement of operations using industry-standard models with various inputs, including quoted forward prices. The initial value of our 100,000 barrel put options from January through June 2015 was approximately $24 million on a gross and net basis, which approximated the time value of the instruments as of December 31, 2014. The following table presents the gross and net fair values of our outstanding derivatives as of September 30, 2015 (in millions): Asset Derivatives Liability Derivatives September 30, 2015 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Commodity contracts Other current assets $ Accrued Liabilities $ Total gross and net fair value $ $ |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2015 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 8 FAIR VALUE MEASUREMENTS We have categorized our assets and liabilities that are measured at fair value in a three-level fair value hierarchy, based on the inputs to the valuation techniques: Level 1 - using quoted prices in active markets for identical assets or liabilities; Level 2 - using observable inputs, such as quoted prices for similar assets and liabilities; and Level 3 - using unobservable inputs. Transfers between levels, if any, are reported at the end of each reporting period. Fair Values - Recurring The following tables present assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 (in millions): September 30, 2015 Level 1 Level 2 Level 3 Collateral Total Assets: Commodity derivative instruments, other current assets $ — $ $ — $ — $ Liabilities: Commodity derivative instruments, accrued liabilities $ — $ $ — $ — $ December 31, 2014 Level 1 Level 2 Level 3 Collateral Total Assets: Commodity derivative instruments, other current assets $ — $ $ — $ — $ Fair Values - Nonrecurring During the nine months ended September 30, 2015 and 2014, we did not have any assets or liabilities measured at fair value on a non-recurring basis. Financial Instruments Fair Value The carrying amounts of cash and other on-balance sheet financial instruments, other than fixed-rate debt, approximate fair value. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2015 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 9 EARNINGS PER SHARE We compute earnings per share (EPS) using the two-class method required for participating securities. Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. Restricted stock awards are considered participating securities because holders of such shares have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares. The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and vested stock awards that have not yet been issued as common stock; however, it excludes outstanding shares related to unvested stock awards. The denominator of diluted EPS is based on the basic shares outstanding, adjusted for the effect of outstanding option awards, to the extent they are dilutive. On the Spin-off date, we issued 381.4 million shares of our common stock. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, we have assumed this amount to be outstanding as of the beginning of each period prior to the Spin-off presented in the calculation of weighted-average shares. In addition, we have assumed the vested stock awards granted in December 2014 were also outstanding for each of the periods presented prior to the Spin-off, resulting in a weighted-average basic share count of 381.8 million shares. The effect of stock options granted in December 2014 was anti-dilutive for the periods presented. For the three and nine months ended September 30, 2015, we issued approximately 792,000 shares and 1.5 million shares, respectively, of common stock in connection with our employee stock purchase plan. The effect of the employee stock purchase plan was anti-dilutive for the three and nine months ended September 30, 2015. The following table presents the calculation of basic and diluted EPS for the three- and nine-month periods ended September 30, 2015 and 2014: Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (in millions, except per-share amounts) Basic EPS calculation Net income / (loss) $ $ $ $ Net income / (loss) allocated to participating securities — — Net income / (loss) available to common stockholders $ $ $ $ Weighted-average common shares outstanding - basic Basic EPS $ $ $ $ Diluted EPS calculation Net income / (loss) $ $ $ $ Net income / (loss) allocated to participating securities — — Net income / (loss) available to common stockholders $ $ $ $ Weighted average common shares outstanding - basic Dilutive effect of potentially dilutive securities — — — — Weighted-average common shares outstanding - diluted Diluted EPS $ $ $ $ |
RETIREMENT AND POSTRETIREMENT B
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2015 | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | NOTE 10 RETIREMENT AND POSTRETIREMENT BENEFIT PLANS The following table sets forth the components of the net periodic benefit costs for our defined benefit pension and postretirement benefit plans: Three months ended September 30, 2015 2014 Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit (in millions) Service cost $ 1 $ 1 $ 1 $ 1 Interest cost 1 1 1 — Expected return on plan assets (1) — (1) — Recognized actuarial loss 1 — — 1 Settlements / Curtailments 10 10 — — Total $ 12 $ 12 $ 1 $ 2 Nine months ended September 30, 2015 2014 Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit (in millions) Service cost $ 3 $ 3 $ 3 $ 3 Interest cost 3 3 3 2 Expected return on plan assets (3) — (4) — Recognized actuarial loss 2 — 1 1 Settlements / Curtailments 18 10 — — Total $ 23 $ 16 $ 3 $ 6 We contributed $3 million to our defined benefit pension plans during the nine months ended September 30, 2015. We expect to contribute $10 million to our defined benefit pension plans in the fourth quarter of 2015. We did not make any contributions during the three-month period ended September 30, 2015, or either of the three- or nine-month periods ended September 30, 2014. The 2015 settlements / curtailments were associated with early retirements. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | NOTE 11 RELATED-PARTY TRANSACTIONS Through July 2014, substantially all of our products were sold to Occidental’s marketing subsidiaries at market prices and were settled at the time of sale to those entities. Beginning August 2014, we started marketing our own products directly to third parties. For the three and nine months ended September 30, 2014, related party sales included oil and natural gas products of approximately $421 million and $2,560 million, respectively, and power (reflected in other revenue) of approximately $25 million and $90 million, respectively. Purchases from related parties reflect products purchased at market prices from Occidental’s subsidiaries prior to the Spin-off and used in our operations. These purchases were approximately $45 million and $165 million for the three and nine months ended September 30, 2014, respectively, and were included in production costs. There were no significant related-party receivable or payable balances at September 30, 2015 and December 31, 2014. Prior to the Spin-off, the statement of operations included expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. Charges from Occidental for these services of approximately $43 million and $120 million for the three and nine months ended September 30, 2014, respectively, are reflected in general and administrative expenses. |
THE SPIN-OFF AND SUMMARY OF S19
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation Until the Spin-off, the accompanying financial statements were derived from the consolidated financial statements and accounting records of Occidental and were presented on a combined basis for the pre-Spin-off periods. These financial statements reflect the historical results of operations, financial position and cash flows of the California business. We account for our share of oil and gas exploration and production ventures, in which we have a direct working interest, by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on the balance sheets and statements of income and cash flows. The statements of income for periods prior to the Spin-off included expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. These allocations were based primarily on specific identification of time or activities associated with us, employee headcount or our relative size compared to Occidental. Our management believes the assumptions underlying the financial statements, including the assumptions regarding allocating expenses from Occidental, are reasonable. However, the financial statements for the pre-Spin-off periods may not include all of the actual expenses that would have been incurred, may include duplicative costs and may not reflect our results of operations, financial position and cash flows had we operated as a stand-alone public company during the periods presented. Actual costs that would have been incurred if we had been a stand-alone company prior to the Spin-off would have depended on multiple factors, including organizational structure and strategic and operating decisions. The assets and liabilities in the pre-Spin-off financial statements are presented on a historical cost basis. We have eliminated all of our significant intercompany transactions and accounts. Prior to the Spin-off, we participated in Occidental’s centralized treasury management program and had not incurred any debt. Excess cash generated by our business was distributed to Occidental, and likewise our cash needs were provided by Occidental, in the form of contributions. All financial information presented after the Spin-off represents our financial position, results of operations and cash flows, as follows: " Our consolidated statements of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2015, as applicable, consist of our stand-alone consolidated results following the Spin-off, and the three and nine months ended September 30, 2014 consist of the combined results of the California business. " Our consolidated balance sheets at September 30, 2015 and December 31, 2014 consist of our consolidated balances. In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2015, and the statements of operations, comprehensive income, and cash flows for the three and nine months ended September 30, 2015 and 2014, as applicable. The income / (loss) and cash flows for the periods ended September 30, 2015 and 2014 are not necessarily indicative of the income / (loss) or cash flows you should expect for the full year. Certain prior year amounts have been reclassified to conform to the 2015 presentation. In the second quarter of 2015, we changed the classification of certain employee-related costs from general and administrative expenses to production costs to better align these costs with the functions performed by those employees. Prior period amounts have been changed to conform to the current year classification. We have prepared this report pursuant to the rules and regulations of the United States Securities and Exchange Commission applicable to interim financial information, which permit omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. You should read this Form 10-Q in conjunction with the consolidated and combined financial statements and the notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2014. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
INVENTORIES | |
Inventories | 2015 2014 (in millions) Materials and supplies $ $ Finished goods Total $ $ |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
DEBT | |
Debt | 2015 2014 (in millions) Revolving Credit Facility $ $ Term Loan Facility 5% notes due 2020 5 1/2% notes due 2021 6% notes due 2024 Total debt Less: Current maturities of long-term debt — Less: Deferred financing costs Total long-term debt, net $ $ |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
DERIVATIVES | |
Gross and net fair values of outstanding derivatives (in millions) | Asset Derivatives Liability Derivatives September 30, 2015 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Commodity contracts Other current assets $ Accrued Liabilities $ Total gross and net fair value $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
FAIR VALUE MEASUREMENTS | |
Assets and liabilities accounted for at fair value on a recurring basis (in millions) | September 30, 2015 Level 1 Level 2 Level 3 Collateral Total Assets: Commodity derivative instruments, other current assets $ — $ $ — $ — $ Liabilities: Commodity derivative instruments, accrued liabilities $ — $ $ — $ — $ December 31, 2014 Level 1 Level 2 Level 3 Collateral Total Assets: Commodity derivative instruments, other current assets $ — $ $ — $ — $ |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
EARNINGS PER SHARE | |
Calculation of basic and diluted EPS | Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (in millions, except per-share amounts) Basic EPS calculation Net income / (loss) $ $ $ $ Net income / (loss) allocated to participating securities — — Net income / (loss) available to common stockholders $ $ $ $ Weighted-average common shares outstanding - basic Basic EPS $ $ $ $ Diluted EPS calculation Net income / (loss) $ $ $ $ Net income / (loss) allocated to participating securities — — Net income / (loss) available to common stockholders $ $ $ $ Weighted average common shares outstanding - basic Dilutive effect of potentially dilutive securities — — — — Weighted-average common shares outstanding - diluted Diluted EPS $ $ $ $ |
RETIREMENT AND POSTRETIREMENT25
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | |
Components of the net periodic benefit cost | Three months ended September 30, 2015 2014 Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit (in millions) Service cost $ 1 $ 1 $ 1 $ 1 Interest cost 1 1 1 — Expected return on plan assets (1) — (1) — Recognized actuarial loss 1 — — 1 Settlements / Curtailments 10 10 — — Total $ 12 $ 12 $ 1 $ 2 Nine months ended September 30, 2015 2014 Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit (in millions) Service cost $ 3 $ 3 $ 3 $ 3 Interest cost 3 3 3 2 Expected return on plan assets (3) — (4) — Recognized actuarial loss 2 — 1 1 Settlements / Curtailments 18 10 — — Total $ 23 $ 16 $ 3 $ 6 |
THE SPIN-OFF AND SUMMARY OF S26
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Spinoff - CRC - Occidental Petroleum And Subsidiaries | Nov. 30, 2014 |
Separation and Spin Off Transactions | |
Percentage of outstanding shares of common stock retained by Occidental | 18.50% |
Number of months from spin off date for divestment of common stock by Occidental | 18 months |
ACCOUNTING AND DISCLOSURE CHA27
ACCOUNTING AND DISCLOSURE CHANGES (Details) $ in Millions | Dec. 31, 2014USD ($) |
ACCOUNTING AND DISCLOSURE CHANGES | |
Unamortized debt issuance costs | $ 68 |
OTHER INFORMATION (Details)
OTHER INFORMATION (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
OTHER INFORMATION | |||
Amount due from joint interest partners, other current assets | $ 110 | $ 120 | |
Deferred tax assets, other current assets | 55 | 60 | |
Greenhouse gas emission assets, other current assets | 40 | 65 | |
Accrued compensation-related costs, accrued liabilities | 130 | 95 | |
Interest payable, accrued liabilities | 65 | 70 | |
Greenhouse gas liabilities, accrued liabilities | 75 | 65 | |
Voluntary retirement and employee reduction charges, accrued liabilities | 40 | ||
Asset Retirement Obligations, other long-term liabilities | 397 | $ 397 | |
Interest Paid | $ 248 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
INVENTORIES | ||
Materials and supplies | $ 69 | $ 66 |
Finished goods | 4 | 5 |
Total | $ 73 | $ 71 |
DEBT (Details)
DEBT (Details) $ in Millions | Nov. 02, 2015USD ($)item | Oct. 01, 2014USD ($) | Sep. 24, 2014 | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt | |||||
Debt | $ 6,481 | $ 6,360 | |||
Less: Current maturities of long-term debt | (75) | ||||
Less: Deferred financing costs | (61) | (68) | |||
Total long-term debt, net | 6,345 | 6,292 | |||
Senior Notes | |||||
Debt | |||||
Aggregate principal amount | $ 5,000 | ||||
Net Proceeds from private placement | 4,950 | ||||
Cash distribution to Occidental in October 2014 | $ 4,950 | ||||
Semi annual interest payment | semi-annually | ||||
Percentage of principal amount at which senior notes can be redeemed | 101.00% | ||||
5.00% Senior notes due 2020 | |||||
Debt | |||||
Debt | $ 1,000 | $ 1,000 | $ 1,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.00% | 5.00% | ||
5.50% Senior notes due 2021 | |||||
Debt | |||||
Debt | $ 1,750 | $ 1,750 | $ 1,750 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | 5.50% | 5.50% | ||
6.00% Senior notes due 2024 | |||||
Debt | |||||
Debt | $ 2,250 | $ 2,250 | $ 2,250 | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | 6.00% | ||
Credit Facilities | Second amendment to credit facilities | Subsequent event | |||||
Debt | |||||
Initial Borrowing Base, Credit Facilities | $ 3,000 | ||||
Percent of commitment required to be held by lenders in order to request a special redetermination | 66.67% | ||||
Number of special redeterminations permitted between scheduled borrowing base redeterminations | item | 1 | ||||
Percentage of proceeds from certain transactions required to be used to repay the term loan | 50.00% | ||||
Maximum dividend payable or other distributions to common stockholders | $ 20 | ||||
Credit Facilities | Second amendment to credit facilities | LIBOR | Subsequent event | |||||
Debt | |||||
Variable rate basis | LIBOR | ||||
Credit Facilities | Second amendment to credit facilities | Alternate Base Rate | Subsequent event | |||||
Debt | |||||
Variable rate basis | alternate base rate | ||||
Variable rate basis | one-month LIBOR | ||||
Interest rate added to variable rate basis(as a percent) | 1.00% | ||||
Credit Facilities | Second amendment to credit facilities | Prime Rate | Subsequent event | |||||
Debt | |||||
Variable rate basis | agent's prime rate | ||||
Credit Facilities | Second amendment to credit facilities | Federal fund rate | Subsequent event | |||||
Debt | |||||
Variable rate basis | federal funds effective rate | ||||
Interest rate added to variable rate basis(as a percent) | 0.50% | ||||
Credit Facilities | Minimum | Second amendment to credit facilities | Subsequent event | |||||
Debt | |||||
Cash on hand in excess of this amount must be used to pay off outstanding debt under the revolving credit facility | $ 250 | ||||
Credit agreement interest expense ratio | 2 | ||||
Credit Facilities | Minimum | Second amendment to credit facilities | LIBOR | Subsequent event | |||||
Debt | |||||
Interest rate added to variable rate basis(as a percent) | 1.50% | ||||
Credit Facilities | Minimum | Second amendment to credit facilities | Alternate Base Rate | Subsequent event | |||||
Debt | |||||
Interest rate added to variable rate basis(as a percent) | 0.50% | ||||
Credit Facilities | Maximum | Second amendment to credit facilities | Subsequent event | |||||
Debt | |||||
Credit agreement leverage ratio | 2.25 | ||||
Credit Facilities | Maximum | Second amendment to credit facilities | LIBOR | Subsequent event | |||||
Debt | |||||
Interest rate added to variable rate basis(as a percent) | 2.75% | ||||
Credit Facilities | Maximum | Second amendment to credit facilities | Alternate Base Rate | Subsequent event | |||||
Debt | |||||
Interest rate added to variable rate basis(as a percent) | 1.75% | ||||
Term loan facility | |||||
Debt | |||||
Debt | $ 1,000 | $ 1,000 | |||
Senior term loan facility and senior revolving credit facility | 5 years | ||||
Term loan facility | Second amendment to credit facilities | Subsequent event | |||||
Debt | |||||
Maximum borrowing capacity | $ 1,000 | ||||
Quarterly installment payment beginning March 31, 2016 | 25 | ||||
Revolving credit facility | |||||
Debt | |||||
Debt | $ 481 | $ 360 | |||
Senior term loan facility and senior revolving credit facility | 5 years | ||||
Revolving credit facility | Second amendment to credit facilities | Subsequent event | |||||
Debt | |||||
Maximum borrowing capacity | $ 2,000 | ||||
Commitment fees on unused portion of the Revolving Credit Facility | 0.50% | ||||
Revolving credit facility | Maximum | Second amendment to credit facilities | Subsequent event | |||||
Debt | |||||
Amount available for additional borrowings if the second amendment had been in place on September 30, 2015 | $ 1,523 | ||||
Letter of Credit | Second amendment to credit facilities | Subsequent event | |||||
Debt | |||||
Maximum borrowing capacity | $ 400 |
DEBT (Details 2)
DEBT (Details 2) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Other Fixed-Rate and Variable-Rate Debt Disclosures | ||
Estimated fair value of long-term debt, including current maturities | $ 4,500 | $ 5,600 |
Net carrying value of long term debt including current maturities | 6,400 | 6,300 |
Aggregate letters of credit issued | $ 23 | $ 25 |
Pro Forma | ||
Other Variable-Rate Debt Disclosures | ||
Percentage of change in the variable interest rates | 0.125% | |
Effect of 1/8 percent change in interest rates | $ 2 |
DERIVATIVES (Details)
DERIVATIVES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015$ / bblbbl | Sep. 30, 2015USD ($)item$ / MMBTU$ / bblbbl | Sep. 30, 2015USD ($)MMBTUitem$ / MMBTU$ / bblbbl | Sep. 30, 2014item | Mar. 31, 2014ft³ / d$ / ft³ | |
Derivatives | |||||
Net derivative gains recognized in net sales (in dollars) | $ | $ 53 | $ 33 | |||
Daily Volume (in cubic feet) | ft³ / d | 50,000,000 | ||||
Weighted-average strike price (in dollars per cubic foot) | $ / ft³ | 0.00430 | ||||
Crude Oil - Put Option January 2015 through June 2015 | |||||
Derivatives | |||||
Crude oil production per day (in barrels per day) | bbl | 100,000 | ||||
Hedge price (in dollars per barrel) | 50 | 50 | |||
Crude Oil Call Option March Through June 2015 | |||||
Derivatives | |||||
Crude oil production per day associated with the call option (in barrels per day) | bbl | 30,000 | ||||
Hedge price (in dollars per barrel) | 75 | 75 | |||
Crude Oil Hedge - Fourth Quarter 2015 | |||||
Derivatives | |||||
Daily volume (in barrels per day) | bbl | 40,000 | ||||
Weighted average floor price | 61.25 | 61.25 | |||
Weighted Average ceiling price | 73.88 | 73.88 | |||
Crude Oil Hedge - January through June 2016 | |||||
Derivatives | |||||
Daily volume (in barrels per day) | bbl | 12,500 | ||||
Floor price | 55 | 55 | |||
Ceiling price | 70 | 70 | |||
Crude oil total hedge for first half 2016 - Ceiling | Subsequent event | |||||
Derivatives | |||||
Daily volume (in barrels per day) | bbl | 35,500 | ||||
Ceiling price | 66.15 | ||||
Crude oil total hedge for first half 2016 - Floor | Subsequent event | |||||
Derivatives | |||||
Daily volume (in barrels per day) | bbl | 30,500 | ||||
Weighted average floor price | 52.38 | ||||
Crude Oil Brent Based Hedge - July through December 2016 | |||||
Derivatives | |||||
Daily volume (in barrels per day) | bbl | 3,000 | ||||
Floor price | 50 | 50 | |||
Weighted Average ceiling price | 74.42 | 74.42 | |||
Natural Gas Index Based Hedge - Fourth Quarter 2015 Member | |||||
Derivatives | |||||
Daily volume (in Mmbtu) | MMBTU | 40,000 | ||||
Hedges average price | $ / MMBTU | 3.01 | 3.01 | |||
Natural Gas Collars Based Hedge - Fourth Quarter 2015 Member | |||||
Derivatives | |||||
Daily volume (in Mmbtu) | MMBTU | 20,000 | ||||
Weighted average floor price | $ / MMBTU | 2.80 | 2.80 | |||
Weighted Average ceiling price | $ / MMBTU | 3.17 | 3.17 | |||
Crude Oil Average Brent Based Hedge - Third Quarter 2015 | |||||
Derivatives | |||||
Daily volume (in barrels per day) | bbl | 70,000 | ||||
Weighted average floor price | 52.14 | 52.14 | |||
Crude Oil Brent Based Hedge - Third Quarter 2015 | |||||
Derivatives | |||||
Daily volume (in barrels per day) | bbl | 30,000 | ||||
Ceiling price | 72.12 | 72.12 | |||
Fair Value Hedges | |||||
Derivatives | |||||
Number of hedges | item | 0 | 0 | 0 |
DERIVATIVES (Details 2)
DERIVATIVES (Details 2) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Gross and net fair values of outstanding derivatives (in millions) | ||
Total gross and net fair value, asset | $ 66 | $ 24 |
Total gross and net fair value, liability | (4) | |
Commodity Contracts | Other current assets. | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative asset, gross | 66 | $ 24 |
Commodity Contracts | Accrued liabilities | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative liability, gross | $ (4) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Level 2 | ||
Assets | ||
Commodity derivative instruments, other current assets | $ 66 | $ 24 |
Liabilities: | ||
Commodity derivative instruments, accrued liabilities | 4 | |
Total Fair Value | ||
Assets | ||
Commodity derivative instruments, other current assets | 66 | $ 24 |
Liabilities: | ||
Commodity derivative instruments, accrued liabilities | $ 4 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2014 | Nov. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic EPS calculation | ||||||
Net income / (loss) | $ (104) | $ 188 | $ (272) | $ 657 | ||
Net income / (loss) allocated to participating securities | (3) | (11) | ||||
Net income / (loss) available to common stockholders | $ (104) | $ 185 | $ (272) | $ 646 | ||
Weighed average common shares outstanding - basic | 383.1 | 381.8 | 382.7 | 381.8 | ||
Basic EPS (in dollars per share) | $ (0.27) | $ 0.48 | $ (0.71) | $ 1.69 | ||
Diluted EPS calculation | ||||||
Net income / (loss) | $ (104) | $ 188 | $ (272) | $ 657 | ||
Net income / (loss) allocated to participating securities | (3) | (11) | ||||
Net income / (loss) available to common stockholders | $ (104) | $ 185 | $ (272) | $ 646 | ||
Weighed average common shares outstanding - basic | 383.1 | 381.8 | 382.7 | 381.8 | ||
Dilutive effect of potentially dilutive securities | ||||||
Weighted average common shares outstanding - diluted | 383.1 | 381.8 | 382.7 | 381.8 | ||
Diluted EPS (in dollars per share) | $ (0.27) | $ 0.48 | $ (0.71) | $ 1.69 | ||
Employee Stock Purchase Plan | ||||||
Diluted EPS calculation | ||||||
Common stock issued under employee stock purchase plan | 792,000 | 1,500,000 | ||||
Occidental Petroleum And Subsidiaries | Spinoff - CRC | ||||||
Diluted EPS calculation | ||||||
Common stock issued upon Spin-off | 381,400,000 | |||||
Weighted average basic share count for periods presented prior to Spin-off | 381,800,000 |
RETIREMENT AND POSTRETIREMENT36
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net periodic benefit costs: | |||||
Employer contributions | $ 0 | $ 0 | $ 3,000,000 | $ 0 | |
Fourth Quarter 2015 Forecast | |||||
Net periodic benefit costs: | |||||
Employer contributions | $ 10,000,000 | ||||
Pension Benefit | |||||
Net periodic benefit costs: | |||||
Service cost | 1,000,000 | 1,000,000 | 3,000,000 | 3,000,000 | |
Interest cost | 1,000,000 | 1,000,000 | 3,000,000 | 3,000,000 | |
Expected return on plan assets | (1,000,000) | (1,000,000) | (3,000,000) | (4,000,000) | |
Recognized actuarial loss | 1,000,000 | 2,000,000 | 1,000,000 | ||
Settlements / Curtailments | 10,000,000 | 18,000,000 | |||
Net periodic benefit cost | 12,000,000 | 1,000,000 | 23,000,000 | 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 | 3,000,000 | 2,000,000 | ||
Recognized actuarial loss | 1,000,000 | 1,000,000 | |||
Settlements / Curtailments | 10,000,000 | 10,000,000 | |||
Net periodic benefit cost | $ 12,000,000 | $ 2,000,000 | $ 16,000,000 | $ 6,000,000 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Sales | $ 421 | $ 2,560 |
Occidental Petroleum And Subsidiaries | ||
Purchases | 45 | 165 |
Occidental Petroleum And Subsidiaries | General and Administrative Expense | ||
Charges for services provided by Occidental prior to the spin-off | 43 | 120 |
Occidental Petroleum And Subsidiaries | Oil and natural gas | ||
Sales | 421 | 2,560 |
Occidental Petroleum And Subsidiaries | Power | other revenue | ||
Sales | $ 25 | $ 90 |