Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-13726 | |
Entity Registrant Name | CHESAPEAKE ENERGY CORPORATION | |
Entity Incorporation, State or Country Code | OK | |
Entity Tax Identification Number | 73-1395733 | |
Entity Address, Address Line One | 6100 North Western Avenue, | |
Entity Address, City or Town | Oklahoma City, | |
Entity Address, State or Province | OK | |
Entity Address, Postal Zip Code | 73118 | |
City Area Code | (405) | |
Local Phone Number | 848-8000 | |
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 Common Stock, Shares Outstanding | 1,954,162,667 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000895126 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock, par value $0.01 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 | |
Trading Symbol | CHK | |
Security Exchange Name | NYSE | |
6.625% Senior Notes due 2020 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.625% Senior Notes due 2020 | |
Trading Symbol | CHK20A | |
Security Exchange Name | NYSE | |
6.875% Senior Notes due 2020 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.875% Senior Notes due 2020 | |
Trading Symbol | CHK20 | |
Security Exchange Name | NYSE | |
6.125% Senior Notes due 2021 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.125% Senior Notes due 2021 | |
Trading Symbol | CHK21 | |
Security Exchange Name | NYSE | |
5.375% Senior Notes due 2021 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 5.375% Senior Notes due 2021 | |
Trading Symbol | CHK21A | |
Security Exchange Name | NYSE | |
4.875% Senior Notes due 2022 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.875% Senior Notes due 2022 | |
Trading Symbol | CHK22 | |
Security Exchange Name | NYSE | |
5.75% Senior Notes due 2023 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 5.75% Senior Notes due 2023 | |
Trading Symbol | CHK23 | |
Security Exchange Name | NYSE | |
4.50% Cumulative Convertible Preferred Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.5% Cumulative Convertible Preferred Stock | |
Trading Symbol | CHK Pr D | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents ($2 and $1 attributable to our VIE) | $ 14 | $ 4 |
Accounts receivable, net | 977 | 1,247 |
Short-term derivative assets | 272 | 209 |
Other current assets | 140 | 138 |
Total Current Assets | 1,403 | 1,598 |
Oil and natural gas properties, at cost based on successful efforts accounting: | ||
Proved oil and natural gas properties ($755 and $755 attributable to our VIE) | 30,288 | 25,407 |
Unproved properties | 2,200 | 1,561 |
Other property and equipment | 1,810 | 1,721 |
Total Property and Equipment, at Cost | 34,298 | 28,689 |
Less: accumulated depreciation, depletion and amortization (($711) and ($707) attributable to our VIE) | (19,432) | (17,886) |
Property and equipment held for sale, net | 10 | 15 |
Total Property and Equipment, Net | 14,876 | 10,818 |
LONG-TERM ASSETS: | ||
Long-term derivative assets | 51 | 76 |
Other long-term assets | 249 | 243 |
TOTAL ASSETS | 16,579 | 12,735 |
CURRENT LIABILITIES: | ||
Accounts payable | 526 | 763 |
Current maturities of long-term debt, net | 208 | 381 |
Accrued interest | 124 | 141 |
Short-term derivative liabilities | 0 | 3 |
Other current liabilities ($1 and $2 attributable to our VIE) | 1,490 | 1,599 |
Total Current Liabilities | 2,348 | 2,887 |
LONG-TERM LIABILITIES: | ||
Long-term debt, net | 9,133 | 7,341 |
Asset retirement obligations, net of current portion | 177 | 155 |
Other long-term liabilities | 186 | 219 |
Total Long-Term Liabilities | 9,496 | 7,715 |
CONTINGENCIES AND COMMITMENTS (Note 7) | ||
Chesapeake Stockholders’ Equity: | ||
Preferred stock, $0.01 par value, 20,000,000 shares authorized: 5,563,458 and 5,603,458 shares outstanding | 1,631 | 1,671 |
Common stock, $0.01 par value, 3,000,000,000 and 2,000,000,000 shares authorized: 1,954,150,951 and 913,715,512 shares issued | 19 | 9 |
Additional paid-in capital | 16,975 | 14,378 |
Accumulated deficit | (13,896) | (13,912) |
Accumulated other comprehensive income (loss) | 3 | (23) |
Less: treasury stock, at cost; 5,623,592 and 3,246,553 common shares | (36) | (31) |
Total Chesapeake Stockholders’ Equity | 4,696 | 2,092 |
Noncontrolling interests | 39 | 41 |
Total Equity | 4,735 | 2,133 |
TOTAL LIABILITIES AND EQUITY | $ 16,579 | $ 12,735 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding (shares) | 5,563,458 | 5,603,458 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 3,000,000,000 | 2,000,000,000 |
Common stock, shares issued (shares) | 1,954,150,951 | 913,715,512 |
Treasury stock, common shares (shares) | 5,623,592 | 3,246,553 |
VIE, cash and cash equivalents | $ 14 | $ 4 |
VIE, proved oil and natural gas properties | 30,288 | 25,407 |
VIE, accumulated depreciation, depletion and amortization | (19,432) | (17,886) |
VIE, other current liabilities | 1,490 | 1,599 |
VIE | ||
VIE, cash and cash equivalents | 2 | 1 |
VIE, proved oil and natural gas properties | 755 | 755 |
VIE, accumulated depreciation, depletion and amortization | (711) | (707) |
VIE, other current liabilities | $ 1 | $ 2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | [1] | Sep. 30, 2019 | Sep. 30, 2018 | [1] | |
REVENUES AND OTHER: | ||||||
Revenues | $ 2,087 | $ 2,424 | $ 6,669 | $ 7,237 | ||
Gains (losses) on sales of assets | 13 | (10) | 33 | 27 | [2] | |
OPERATING EXPENSES: | ||||||
Production taxes | 35 | 34 | 109 | 91 | ||
General and administrative | 66 | 81 | 258 | 273 | ||
Restructuring and other termination costs | 0 | 0 | 0 | 38 | ||
Provision for legal contingencies, net | 0 | 8 | 3 | 17 | ||
Depreciation, depletion and amortization | 573 | 405 | 1,672 | 1,335 | [2] | |
Impairments | 9 | 58 | 11 | 122 | [2] | |
Other operating (income) expense | 15 | 0 | 79 | (1) | ||
Total Operating Expenses | 2,041 | 2,342 | 6,527 | 7,273 | ||
INCOME (LOSS) FROM OPERATIONS | 46 | 82 | 142 | (36) | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense | (177) | (165) | (513) | (482) | ||
Gains (losses) on investments | (4) | 0 | (28) | 139 | ||
Gains (losses) on purchases or exchanges of debt | 70 | (68) | 70 | (68) | ||
Other income | 3 | 6 | 30 | 62 | ||
Total Other Expense | (108) | (227) | (441) | (349) | ||
LOSS BEFORE INCOME TAXES | (62) | (145) | (299) | (385) | ||
Income tax expense (benefit) | (1) | 1 | (315) | (8) | ||
NET INCOME (LOSS) | (61) | (146) | [3] | 16 | (377) | [2],[3] |
Net income attributable to noncontrolling interests | 0 | 0 | [3] | 0 | (1) | [3] |
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (61) | (146) | 16 | (378) | ||
Preferred stock dividends | (23) | (23) | (69) | (69) | ||
Loss on exchange of preferred stock | (17) | 0 | (17) | 0 | ||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (101) | $ (169) | $ (70) | $ (447) | ||
LOSS PER COMMON SHARE: | ||||||
Basic (in dollars per share) | $ (0.06) | $ (0.19) | $ (0.04) | $ (0.49) | ||
Diluted (in dollars per share) | $ (0.06) | $ (0.19) | $ (0.04) | $ (0.49) | ||
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): | ||||||
Basic (in shares) | 1,698 | 910 | 1,570 | 909 | ||
Diluted (in shares) | 1,698 | 910 | 1,570 | 909 | ||
Oil, natural gas and NGL | ||||||
REVENUES AND OTHER: | ||||||
Revenues | $ 1,170 | $ 1,199 | $ 3,553 | $ 3,424 | ||
Marketing | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 889 | 1,219 | 3,038 | 3,738 | ||
OPERATING EXPENSES: | ||||||
Expense | 901 | 1,238 | 3,071 | 3,798 | ||
Oil, natural gas and NGL and Marketing | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 2,059 | 2,418 | 6,591 | 7,162 | ||
Other | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 15 | 16 | 45 | 48 | ||
Oil, natural gas and NGL production | ||||||
OPERATING EXPENSES: | ||||||
Expense | 155 | 132 | 453 | 417 | ||
Oil, natural gas and NGL gathering, processing and transportation | ||||||
OPERATING EXPENSES: | ||||||
Expense | 270 | 364 | 815 | 1,060 | ||
Exploration | ||||||
OPERATING EXPENSES: | ||||||
Expense | $ 17 | $ 22 | $ 56 | $ 123 | ||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||||
Statement of Comprehensive Income [Abstract] | |||||||
NET INCOME (LOSS) | $ (61) | $ (146) | [1],[2] | $ 16 | $ (377) | [1],[2],[3] | |
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: | |||||||
Unrealized gains on derivative instruments | [4] | 0 | 0 | ||||
Unrealized gains on derivative instruments | [1],[4] | 0 | 0 | ||||
Reclassification of losses on settled derivative instruments | [4] | 8 | 26 | ||||
Reclassification of losses on settled derivative instruments | [1],[4] | 8 | 25 | ||||
Other Comprehensive Income | 8 | 8 | [1] | 26 | 25 | [1] | |
COMPREHENSIVE INCOME (LOSS) | (53) | (138) | [1] | 42 | (352) | [1] | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | [1] | 0 | (1) | [1] | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | $ (53) | $ (138) | [1] | $ 42 | $ (353) | [1] | |
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[4] | Deferred tax activity incurred in other comprehensive income was offset by a valuation allowance. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
NET INCOME (LOSS) | $ 16 | $ (377) | [1],[2],[3] |
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED BY OPERATING ACTIVITIES: | |||
Depreciation, depletion and amortization | 1,672 | 1,335 | [2],[3] |
Deferred income tax benefit | (314) | (10) | [2] |
Derivative (gains) losses, net | (137) | 500 | [2] |
Cash receipts (payments) on derivative settlements, net | 129 | (162) | [2] |
Stock-based compensation | 24 | 25 | [2] |
Gains on sales of assets | (33) | (27) | [2],[3] |
Impairments | 11 | 122 | [2],[3] |
Exploration | 35 | 81 | [2] |
(Gains) losses on investments | 21 | (139) | [2] |
(Gains) losses on purchases or exchanges of debt | (70) | 68 | |
Other | 42 | (90) | [2] |
Changes in assets and liabilities | (214) | 69 | [2] |
Net Cash Provided By Operating Activities | 1,182 | 1,395 | [2] |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Drilling and completion costs | (1,640) | (1,407) | [2] |
Business combination, net | (353) | 0 | [2] |
Acquisitions of proved and unproved properties | (31) | (118) | [2] |
Proceeds from divestitures of proved and unproved properties | 110 | 395 | [2] |
Additions to other property and equipment | (27) | (11) | [2] |
Proceeds from sales of other property and equipment | 6 | 75 | [2] |
Proceeds from sales of investments | 0 | 74 | [2] |
Net Cash Used In Investing Activities | (1,935) | (992) | [2] |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility borrowings | 8,805 | 9,095 | [2] |
Payments on revolving credit facility borrowings | (7,495) | (9,231) | [2] |
Proceeds from issuance of senior notes, net | 0 | 1,237 | [2] |
Cash paid to purchase debt | (457) | (1,285) | [2] |
Extinguishment of other financing | 0 | (122) | [2] |
Cash paid for preferred stock dividends | (69) | (69) | [2] |
Distributions to noncontrolling interest owners | (2) | (5) | [2] |
Other | (19) | (24) | [2] |
Net Cash Provided By (Used In) Financing Activities | 763 | (404) | [2] |
Net increase (decrease) in cash and cash equivalents | 10 | (1) | [2] |
Cash and cash equivalents, beginning of period | 4 | 5 | [2] |
Cash and cash equivalents, end of period | 14 | 4 | [2] |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Interest paid, net of capitalized interest | 487 | 527 | [2] |
Income taxes paid, net of refunds received | (6) | (3) | [2] |
SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Common stock issued for business combination | 2,037 | 0 | [2] |
Debt exchanged for common stock | 693 | 0 | [2] |
Preferred stock exchanged for common stock | 40 | 0 | [2] |
Change in senior notes exchanged | 35 | 0 | [2] |
Change in accrued drilling and completion costs | |||
SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Change in non-cash investing and financing activities | 49 | 142 | [2] |
Change in divested proved and unproved properties | |||
SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Change in non-cash investing and financing activities | $ (144) | $ (5) | [2] |
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | PREFERRED STOCK: | COMMON STOCK: | ADDITIONAL PAID-IN CAPITAL: | ADDITIONAL PAID-IN CAPITAL:Exchange of preferred stock for shares of common stock | ADDITIONAL PAID-IN CAPITAL:Exchange of senior notes for shares of common stock | ADDITIONAL PAID-IN CAPITAL:Exchange of convertible senior notes for common stock | ACCUMULATED DEFICIT: | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | TREASURY STOCK – COMMON: | TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY | NONCONTROLLING INTERESTS: | ||||
Chesapeake stockholders’ equity, beginning of period at Dec. 31, 2017 | [1] | $ 1,671 | $ 9 | $ 14,437 | $ (14,130) | $ (57) | $ (31) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exchange of 40,000, 0, 40,000 and 0 shares of preferred stock for common stock | [1] | 0 | ||||||||||||||
Common shares issued for WildHorse Merger | [1] | 0 | 0 | |||||||||||||
Exchange of senior notes and convertible senior notes | [1] | 0 | ||||||||||||||
Exchange of preferred stock | [1] | $ 0 | ||||||||||||||
Exchange of notes | [1] | $ 0 | $ 0 | |||||||||||||
Equity component of convertible notes repurchases | [1] | 0 | ||||||||||||||
Stock-based compensation | [1] | 26 | ||||||||||||||
Dividends on preferred stock | [1] | (69) | ||||||||||||||
Net income (loss) attributable to Chesapeake | $ (378) | [2] | (378) | [1] | ||||||||||||
Hedging activity | [1] | 25 | ||||||||||||||
Purchase of 53,337, 30,509, 2,673,903, and 1,499,033 shares for company benefit plans | [1] | (4) | ||||||||||||||
Release of 37,301, 41,617, 296,864 and 431,474 shares from company benefit plans | [1] | 4 | ||||||||||||||
Chesapeake stockholders’ equity, end of period at Sep. 30, 2018 | [1] | 1,671 | 9 | 14,394 | (14,516) | (32) | (31) | $ 1,495 | ||||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period at Dec. 31, 2017 | [1] | $ 44 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income attributable to noncontrolling interests | (1) | [2],[3] | 1 | [1] | ||||||||||||
Distributions to noncontrolling interest owners | [1] | (5) | ||||||||||||||
Stockholders' equity attributable to noncontrolling interest, end of period at Sep. 30, 2018 | [1] | 40 | ||||||||||||||
Chesapeake stockholders’ equity, beginning of period at Jun. 30, 2018 | [1] | 1,671 | 9 | 14,408 | (14,370) | (40) | (31) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exchange of 40,000, 0, 40,000 and 0 shares of preferred stock for common stock | [1] | 0 | ||||||||||||||
Common shares issued for WildHorse Merger | [1] | 0 | 0 | |||||||||||||
Exchange of senior notes and convertible senior notes | [1] | 0 | ||||||||||||||
Exchange of preferred stock | [1] | 0 | ||||||||||||||
Exchange of notes | [1] | 0 | 0 | |||||||||||||
Equity component of convertible notes repurchases | [1] | 0 | ||||||||||||||
Stock-based compensation | [1] | 9 | ||||||||||||||
Dividends on preferred stock | [1] | (23) | ||||||||||||||
Net income (loss) attributable to Chesapeake | (146) | [2] | (146) | [1] | ||||||||||||
Hedging activity | [1] | 8 | ||||||||||||||
Purchase of 53,337, 30,509, 2,673,903, and 1,499,033 shares for company benefit plans | [1] | 0 | ||||||||||||||
Release of 37,301, 41,617, 296,864 and 431,474 shares from company benefit plans | [1] | 0 | ||||||||||||||
Chesapeake stockholders’ equity, end of period at Sep. 30, 2018 | [1] | 1,671 | 9 | 14,394 | (14,516) | (32) | (31) | 1,495 | ||||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period at Jun. 30, 2018 | [1] | 42 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income attributable to noncontrolling interests | 0 | [2],[3] | 0 | [1] | ||||||||||||
Distributions to noncontrolling interest owners | [1] | (2) | ||||||||||||||
Stockholders' equity attributable to noncontrolling interest, end of period at Sep. 30, 2018 | [1] | 40 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Total Equity | [1] | 1,535 | ||||||||||||||
Total Equity | 2,133 | |||||||||||||||
Chesapeake stockholders’ equity, beginning of period at Dec. 31, 2018 | 2,092 | 1,671 | 9 | 14,378 | (13,912) | (23) | (31) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exchange of 40,000, 0, 40,000 and 0 shares of preferred stock for common stock | (40) | |||||||||||||||
Common shares issued for WildHorse Merger | 7 | 2,030 | ||||||||||||||
Exchange of senior notes and convertible senior notes | 3 | |||||||||||||||
Exchange of preferred stock | 40 | |||||||||||||||
Exchange of notes | 438 | 134 | ||||||||||||||
Equity component of convertible notes repurchases | (2) | |||||||||||||||
Stock-based compensation | 26 | |||||||||||||||
Dividends on preferred stock | (69) | |||||||||||||||
Net income (loss) attributable to Chesapeake | 16 | 16 | ||||||||||||||
Hedging activity | 26 | |||||||||||||||
Purchase of 53,337, 30,509, 2,673,903, and 1,499,033 shares for company benefit plans | (7) | |||||||||||||||
Release of 37,301, 41,617, 296,864 and 431,474 shares from company benefit plans | 2 | |||||||||||||||
Chesapeake stockholders’ equity, end of period at Sep. 30, 2019 | 4,696 | 1,631 | 19 | 16,975 | (13,896) | [1] | 3 | (36) | 4,696 | |||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period at Dec. 31, 2018 | 41 | 41 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income attributable to noncontrolling interests | 0 | 0 | ||||||||||||||
Distributions to noncontrolling interest owners | (2) | |||||||||||||||
Stockholders' equity attributable to noncontrolling interest, end of period at Sep. 30, 2019 | 39 | 39 | ||||||||||||||
Chesapeake stockholders’ equity, beginning of period at Jun. 30, 2019 | 1,671 | 16 | 16,380 | (13,835) | (5) | (36) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exchange of 40,000, 0, 40,000 and 0 shares of preferred stock for common stock | (40) | |||||||||||||||
Common shares issued for WildHorse Merger | 0 | 0 | ||||||||||||||
Exchange of senior notes and convertible senior notes | 3 | |||||||||||||||
Exchange of preferred stock | $ 40 | |||||||||||||||
Exchange of notes | $ 438 | $ 134 | ||||||||||||||
Equity component of convertible notes repurchases | (2) | |||||||||||||||
Stock-based compensation | 8 | |||||||||||||||
Dividends on preferred stock | (23) | |||||||||||||||
Net income (loss) attributable to Chesapeake | (61) | (61) | ||||||||||||||
Hedging activity | 8 | |||||||||||||||
Purchase of 53,337, 30,509, 2,673,903, and 1,499,033 shares for company benefit plans | 0 | |||||||||||||||
Release of 37,301, 41,617, 296,864 and 431,474 shares from company benefit plans | 0 | |||||||||||||||
Chesapeake stockholders’ equity, end of period at Sep. 30, 2019 | 4,696 | $ 1,631 | $ 19 | $ 16,975 | $ (13,896) | [1] | $ 3 | $ (36) | $ 4,696 | |||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period at Jun. 30, 2019 | 39 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income attributable to noncontrolling interests | 0 | 0 | ||||||||||||||
Distributions to noncontrolling interest owners | 0 | |||||||||||||||
Stockholders' equity attributable to noncontrolling interest, end of period at Sep. 30, 2019 | 39 | $ 39 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Total Equity | $ 4,735 | |||||||||||||||
[1] | Financial information for prior periods has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||||||||||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||||||||||||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
PREFERRED STOCK | ||||
Preferred stock exchanges (in shares) | 40,000 | 0 | 40,000 | 0 |
TREASURY STOCK – COMMON: | ||||
Purchase of shares for company benefit plans (in shares) | 53,337 | 30,509 | 2,673,903 | 1,499,033 |
Release of shares from company benefit plans (in shares) | 37,301 | 41,617 | 296,864 | 431,474 |
Exchange of preferred stock for shares of common stock | ADDITIONAL PAID-IN CAPITAL: | ||||
Preferred stock exchanges (in shares) | 10,367,950 | 0 | 10,367,950 | 0 |
Exchange of senior notes for shares of common stock | ADDITIONAL PAID-IN CAPITAL: | ||||
Preferred stock exchanges (in shares) | 235,563,519 | 0 | 235,563,519 | 0 |
Exchange of convertible senior notes for common stock | ADDITIONAL PAID-IN CAPITAL: | ||||
Preferred stock exchanges (in shares) | 73,389,094 | 0 | 73,389,094 | 0 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements of Chesapeake were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures have been condensed or omitted. This Form 10-Q relates to the three and nine months ended September 30, 2019 (the “Current Quarter” and the “Current Period”, respectively) and the three and nine months ended September 30, 2018 (the “Prior Quarter” and the “Prior Period”, respectively). Our Form 8-K dated May 9, 2019 should be read in conjunction with this Form 10-Q. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our direct and indirect wholly owned subsidiaries and entities in which we have a controlling financial interest. Intercompany accounts and balances have been eliminated . Recast Financial Information for Change in Accounting Principle In the first quarter of 2019, we voluntarily changed our method of accounting for oil and natural gas exploration and development activities from the full cost method to the successful efforts method. Accordingly, financial information for prior periods has been recast to reflect retrospective application of the successful efforts method. Although the full cost method of accounting for oil and natural gas exploration and development activities continues to be an accepted alternative, the successful efforts method of accounting is the generally preferred method of the SEC and, because it is more widely used in the industry, we expect the change to improve the comparability of our financial statements to our peers. We also believe the successful efforts method provides a more representational depiction of assets and operating results and provides for our investments in oil and natural gas properties to be assessed for impairment in accordance with Accounting Standards Codification (ASC) Topic 360, Property Plant and Equipment, rather than valuations based on prices and costs prescribed under the full cost method as of the balance sheet date. For detailed information regarding the effects of the change to the successful efforts method, see Note 2 . Oil and Natural Gas Properties We follow the successful efforts method of accounting for our oil and natural gas properties. Under this method, exploration costs, such as exploratory geological and geophysical costs, expiration of unproved leasehold, delay rentals and exploration overhead are expensed as incurred. All costs related to production, general corporate overhead and similar activities are also expensed as incurred. All property acquisition costs and development costs are capitalized when incurred. Exploratory drilling costs are initially capitalized, or suspended, pending the determination of proved reserves. If proved reserves are found, drilling costs remain capitalized and are classified as proved properties. Costs of unsuccessful wells are charged to exploration expense. For exploratory wells that find reserves that cannot be classified as proved when drilling is completed, costs continue to be capitalized as suspended exploratory drilling costs if there have been sufficient reserves found to justify completion as a producing well and sufficient progress is being made in assessing the reserves and the economic and operational viability of the project. If we determine that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed. In some instances, this determination may take longer than one year. We review the status of all suspended exploratory drilling costs quarterly. Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of oil and natural gas, are capitalized. Costs of drilling and equipping successful wells, costs to construct or acquire facilities, and associated asset retirement costs are depreciated using the unit-of-production (UOP) method based on total estimated proved developed oil and gas reserves. Costs of acquiring proved properties, including leasehold acquisition costs transferred from unproved properties, are depleted using the UOP method based on total estimated proved developed and undeveloped reserves. Proceeds from the sales of individual oil and natural gas properties and the capitalized costs of individual properties sold or abandoned are credited and charged, respectively, to accumulated depreciation, depletion and amortization, if doing so does not materially impact the depletion rate of an amortization base. Generally, no gain or loss is recognized until an entire amortization base is sold. However, a gain or loss is recognized from the sale of less than an entire amortization base if the disposition is significant enough to materially impact the depletion rate of the remaining properties in the amortization base. When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, we compare unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on our estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized costs, the capitalized costs are reduced to fair value. Fair value is generally estimated using the income approach described in the ASC 820, Fair Value Measurements . If applicable, we utilize prices and other relevant information generated by market transactions involving assets and liabilities that are identical or comparable to the item being measured as the basis for determining fair value. The expected future cash flows used for impairment reviews and related fair value measurements are typically based on judgmental assessments of future production volumes, commodity prices, operating costs, and capital investment plans, considering all available information at the date of review. These assumptions are applied to develop future cash flow projections that are then discounted to estimated fair value, using a discount rate believed to be consistent with those applied by market participants. We have classified these fair value measurements as Level 3 in the fair value hierarchy. Capitalized Interest Interest from external borrowings is capitalized on significant investments in major development projects until the asset is ready for service using the weighted average borrowing rate of outstanding borrowings. Capitalized interest is determined by multiplying our weighted average borrowing cost on debt by the average amount of qualifying costs incurred. Capitalized interest is depreciated over the useful lives of the assets in the same manner as the depreciation of the underlying asset. Recently Issued Accounting Standards In February 2016, the FASB issued Auditing Standards Update (ASU) 2016-02, Leases (Topic 842) (“ASC 842”) , which requires lessees to recognize a lease liability and a right-of-use (ROU) asset on the balance sheet for all leases, including operating leases, with terms in excess of 12 months. As the implicit rate of the lease is not always readily determinable, the company uses its incremental borrowing rate to calculate the present value of lease payments based on information available at the commencement date. Operating ROU assets are included in other long-term assets while operating lease liabilities are included in other current and other long-term liabilities on the condensed consolidated balance sheet. Finance ROU assets are reflected in total property and equipment, net, while finance lease liabilities are included in other current and other long-term liabilities on the condensed consolidated balance sheet. ASC 842 does not apply to our leases of mineral rights to explore for or use oil and natural gas resources, including the intangible rights to explore for those natural resources and rights to use the land in which those natural resources are contained. We adopted the new standard on January 1, 2019 and as permitted by ASU 2018-11, Leases (Topic 842): Targeted Improvements , we will not adjust comparative-period financial statements and will continue to apply the guidance in Topic 840, including its disclosure requirements, in the comparative periods presented prior to adoption. No cumulative-effect adjustment to retained earnings was required as a result of the modified retrospective approach. Upon adoption of ASC 842, we made certain elections permitting us to not reassess: (1) whether any expired or existing contracts contained leases (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. Upon adoption of ASC 842, we also made an election permitting us to continue applying our current policy for land easements. The adoption of ASC 842 did not result in a material impact on our balance sheet, results of operations or cash flows. Short-term leases will not be recognized on the balance sheet as an asset or a liability, and the related rental expense will be expensed as incurred. We have short-term lease agreements related to most of our drilling rig arrangements and hydraulic fracturing arrangements and some of our compressor rental arrangements. See Note 9 for further information regarding leases. |
Change in Accounting Principle
Change in Accounting Principle | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Change in Accounting Principle | Change in Accounting Principle In the first quarter of 2019, we voluntarily changed our method of accounting for oil and natural gas exploration and development activities from the full cost method to the successful efforts method. Accordingly, financial information for prior periods has been recast to reflect retrospective application of the successful efforts method. In general, under successful efforts, exploration costs such as exploratory dry holes, exploratory geophysical and geological costs, delay rentals, unproved leasehold impairments and exploration overhead are charged against earnings as incurred, versus being capitalized under the full cost method of accounting. The successful efforts method also provides for the assessment of potential property impairments by comparing the net carrying value of oil and natural gas properties to associated projected undiscounted pre-tax future net cash flows. If the expected undiscounted pre-tax future net cash flows are lower than the unamortized capitalized costs, the capitalized costs are reduced to fair value. Under the full cost method of accounting, a write-down would be required if the net carrying value of oil and natural gas properties exceeds a full cost ceiling using an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months. In addition, gains or losses, if applicable, are generally recognized on the disposition of oil and natural gas property and equipment under the successful efforts method, as opposed to an adjustment to the net carrying value of the assets remaining under the full cost method. Our condensed consolidated financial statements have been recast to reflect these differences. Three Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 1,170 $ — $ 1,170 Marketing 889 — 889 Total Revenues 2,059 — 2,059 Other — 15 15 Gains on sales of assets — 13 13 Total Revenues and Other 2,059 28 2,087 OPERATING EXPENSES: Oil, natural gas and NGL production 155 — 155 Oil, natural gas and NGL gathering, processing and transportation 270 — 270 Production taxes 35 — 35 Exploration — 17 17 Marketing 901 — 901 General and administrative 52 14 66 Depreciation, depletion and amortization 421 152 573 Impairments 1 8 9 Other operating expense 15 — 15 Total Operating Expenses 1,850 191 2,041 INCOME FROM OPERATIONS 209 (163 ) 46 OTHER INCOME (EXPENSE): Interest expense (134 ) (43 ) (177 ) Losses on investments (4 ) — (4 ) Gains on purchases or exchanges of debt 70 — 70 Other income 2 1 3 Total Other Expense (66 ) (42 ) (108 ) INCOME (LOSS) BEFORE INCOME TAXES 143 (205 ) (62 ) Income tax benefit (1 ) — (1 ) NET INCOME (LOSS) 144 (205 ) (61 ) Net loss attributable to noncontrolling interests — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 144 (205 ) (61 ) Preferred stock dividends (23 ) — (23 ) Loss on exchange of preferred stock (17 ) — (17 ) NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 104 $ (205 ) $ (101 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.06 $ (0.12 ) $ (0.06 ) Diluted $ 0.06 $ (0.12 ) $ (0.06 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 1,698 — 1,698 Diluted 1,698 — 1,698 Three Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Full Cost Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 1,199 $ — $ 1,199 Marketing 1,219 — 1,219 Total Revenues 2,418 — 2,418 Other — 16 16 Losses on sales of assets — (10 ) (10 ) Total Revenues and Other 2,418 6 2,424 OPERATING EXPENSES: Oil, natural gas and NGL production 132 — 132 Oil, natural gas and NGL gathering, processing and transportation 364 — 364 Production taxes 34 — 34 Exploration — 22 22 Marketing 1,238 — 1,238 General and administrative 66 15 81 Provision for legal contingencies, net 8 — 8 Depreciation, depletion and amortization 291 114 405 Impairments 5 53 58 Total Operating Expenses 2,138 204 2,342 INCOME FROM OPERATIONS 280 (198 ) 82 OTHER INCOME (EXPENSE): Interest expense (127 ) (38 ) (165 ) Losses on purchases or exchanges of debt (68 ) — (68 ) Other income 1 5 6 Total Other Expense (194 ) (33 ) (227 ) INCOME (LOSS) BEFORE INCOME TAXES 86 (231 ) (145 ) Income tax expense 1 — 1 NET INCOME (LOSS) 85 (231 ) (146 ) Net income attributable to noncontrolling interests (1 ) 1 — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 84 (230 ) (146 ) Preferred stock dividends (23 ) — (23 ) Earnings allocated to participating securities (1 ) 1 — NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 60 $ (229 ) $ (169 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.07 $ (0.26 ) $ (0.19 ) Diluted $ 0.07 $ (0.26 ) $ (0.19 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 910 — 910 Diluted 911 (1 ) 910 Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 3,553 $ — $ 3,553 Marketing 3,038 — 3,038 Total Revenues 6,591 — 6,591 Other — 45 45 Gains on sales of assets — 33 33 Total Revenues and Other 6,591 78 6,669 OPERATING EXPENSES: Oil, natural gas and NGL production 453 — 453 Oil, natural gas and NGL gathering, processing and transportation 815 — 815 Production taxes 109 — 109 Exploration — 56 56 Marketing 3,071 — 3,071 General and administrative 216 42 258 Provision for legal contingencies 3 — 3 Depreciation, depletion and amortization 1,197 475 1,672 Gain on sale of oil and natural gas properties (10 ) 10 — Impairments 3 8 11 Other operating expense 79 — 79 Total Operating Expenses 5,936 591 6,527 INCOME FROM OPERATIONS 655 (513 ) 142 OTHER INCOME (EXPENSE): Interest expense (400 ) (113 ) (513 ) Losses on investments (28 ) — (28 ) Gains on purchases or exchanges of debt 70 — 70 Other income 22 8 30 Total Other Expense (336 ) (105 ) (441 ) INCOME (LOSS) BEFORE INCOME TAXES 319 (618 ) (299 ) Income tax benefit (315 ) — (315 ) NET INCOME 634 (618 ) 16 Net income attributable to noncontrolling interests (1 ) 1 — NET INCOME ATTRIBUTABLE TO CHESAPEAKE 633 (617 ) 16 Preferred stock dividends (69 ) — (69 ) Loss on exchange of preferred stock (17 ) — (17 ) Earnings allocated to participating securities (2 ) 2 — NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 545 $ (615 ) $ (70 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.35 $ (0.39 ) $ (0.04 ) Diluted $ 0.35 $ (0.39 ) $ (0.04 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 1,570 — 1,570 Diluted 1,570 — 1,570 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Full Cost Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 3,424 $ — $ 3,424 Marketing 3,738 — 3,738 Total Revenues 7,162 — 7,162 Other — 48 48 Gains on sales of assets — 27 27 Total Revenues and Other 7,162 75 7,237 OPERATING EXPENSES: Oil, natural gas and NGL production 417 — 417 Oil, natural gas and NGL gathering, processing and transportation 1,060 — 1,060 Production taxes 91 — 91 Exploration — 123 123 Marketing 3,798 — 3,798 General and administrative 229 44 273 Restructuring and other termination costs 38 — 38 Provision for legal contingencies, net 17 — 17 Depreciation, depletion and amortization 867 468 1,335 Impairments 51 71 122 Other operating (income) expense 6 (7 ) (1 ) Total Operating Expenses 6,574 699 7,273 INCOME (LOSS) FROM OPERATIONS 588 (624 ) (36 ) OTHER INCOME (EXPENSE): Interest expense (367 ) (115 ) (482 ) Gains on investments 139 — 139 Losses on purchases or exchanges of debt (68 ) — (68 ) Other income 63 (1 ) 62 Total Other Expense (233 ) (116 ) (349 ) INCOME (LOSS) BEFORE INCOME TAXES 355 (740 ) (385 ) Income tax benefit (8 ) — (8 ) NET INCOME (LOSS) 363 (740 ) (377 ) Net income attributable to noncontrolling interests (3 ) 2 (1 ) NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 360 (738 ) (378 ) Preferred stock dividends (69 ) — (69 ) Earnings allocated to participating securities (3 ) 3 — NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 288 $ (735 ) $ (447 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.32 $ (0.81 ) $ (0.49 ) Diluted $ 0.32 $ (0.81 ) $ (0.49 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 909 — 909 Diluted 909 — 909 Three Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME (LOSS) $ 144 $ (205 ) $ (61 ) OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 8 — 8 Other Comprehensive Income 8 — 8 COMPREHENSIVE INCOME (LOSS) 152 (205 ) (53 ) COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS — — — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 152 $ (205 ) $ (53 ) Three Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME (LOSS) $ 85 $ (231 ) $ (146 ) OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 8 — 8 Other Comprehensive Income 8 — 8 COMPREHENSIVE INCOME (LOSS) 93 (231 ) (138 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1 ) 1 — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 92 $ (230 ) $ (138 ) Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME $ 634 $ (618 ) $ 16 OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 26 — 26 Other Comprehensive Income 26 — 26 COMPREHENSIVE INCOME 660 (618 ) 42 COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1 ) 1 — COMPREHENSIVE INCOME ATTRIBUTABLE TO CHESAPEAKE $ 659 $ (617 ) $ 42 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME (LOSS) $ 363 $ (740 ) $ (377 ) OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 25 — 25 Other Comprehensive Income 25 — 25 COMPREHENSIVE INCOME (LOSS) 388 (740 ) (352 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (3 ) 2 (1 ) COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 385 $ (738 ) $ (353 ) Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Under Full Cost Successful Under Successful Efforts ($ in millions) CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 634 $ (618 ) $ 16 ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation, depletion and amortization 1,197 475 1,672 Deferred income tax benefit (314 ) — (314 ) Derivative losses, net (137 ) — (137 ) Cash receipts on derivative settlements, net 129 — 129 Stock-based compensation 24 — 24 Gains on sales of assets — (33 ) (33 ) Impairments 3 8 11 Exploration — 35 35 Losses on investments 21 — 21 Gains on purchases of debt (70 ) — (70 ) Other 33 9 42 Changes in assets and liabilities (169 ) (45 ) (214 ) Net Cash Provided By Operating Activities 1,351 (169 ) 1,182 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs (1,694 ) 54 (1,640 ) Business combination, net (353 ) — (353 ) Acquisitions of proved and unproved properties (146 ) 115 (31 ) Proceeds from divestitures of proved and unproved properties 110 — 110 Additions to other property and equipment (27 ) — (27 ) Proceeds from sales of other property and equipment 6 — 6 Net Cash Used In Investing Activities (2,104 ) 169 (1,935 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 8,805 — 8,805 Payments on revolving credit facility borrowings (7,495 ) — (7,495 ) Cash paid to purchase debt (457 ) — (457 ) Cash paid for preferred stock dividends (69 ) — (69 ) Distributions to noncontrolling interest owners (2 ) — (2 ) Other (19 ) — (19 ) Net Cash Provided By Financing Activities 763 — 763 Net increase in cash and cash equivalents 10 — 10 Cash and cash equivalents, beginning of period 4 — 4 Cash and cash equivalents, end of period $ 14 $ — $ 14 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Under Full Cost Successful Under Successful Efforts ($ in millions) CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) $ 363 $ (740 ) $ (377 ) ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation, depletion and amortization 867 468 1,335 Deferred income tax benefit (10 ) — (10 ) Derivative losses, net 500 — 500 Cash payments on derivative settlements, net (162 ) — (162 ) Stock-based compensation 25 — 25 Gains on sales of assets — (27 ) (27 ) Impairments 51 71 122 Exploration — 81 81 Gains on investments (139 ) — (139 ) Losses on purchases or exchanges of debt 68 — 68 Other (83 ) (7 ) (90 ) Changes in assets and liabilities 116 (47 ) 69 Net Cash Provided By Operating Activities 1,596 (201 ) 1,395 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs (1,482 ) 75 (1,407 ) Acquisitions of proved and unproved properties (244 ) 126 (118 ) Proceeds from divestitures of proved and unproved properties 395 — 395 Additions to other property and equipment (11 ) — (11 ) Proceeds from sales of other property and equipment 75 — 75 Proceeds from sales of investments 74 — 74 Net Cash Used In Investing Activities (1,193 ) 201 (992 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 9,095 — 9,095 Payments on revolving credit facility borrowings (9,231 ) — (9,231 ) Proceeds from issuance of senior notes, net 1,237 — 1,237 Cash paid to purchase debt (1,285 ) — (1,285 ) Extinguishment of other financing (122 ) — (122 ) Cash paid for preferred stock dividends (69 ) — (69 ) Distributions to noncontrolling interest owners (5 ) — (5 ) Other (24 ) — (24 ) Net Cash Used In Financing Activities (404 ) — (404 ) Net decrease in cash and cash equivalents (1 ) — (1 ) Cash and cash equivalents, beginning of period 5 — 5 Cash and cash equivalents, end of period $ 4 $ — $ 4 Three Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning of period $ 1,671 $ — $ 1,671 Exchange of 40,000 shares of preferred stock for common stock (40 ) — (40 ) Balance, end of period 1,631 — 1,631 COMMON STOCK: Balance, beginning of period 16 — 16 Exchange of senior notes and convertible senior notes 3 — 3 Exchange of preferred stock — — — Balance, end of period 19 — 19 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 16,380 — 16,380 Exchange of preferred stock for 10,367,950 shares of common stock 40 — 40 Exchange of senior notes for 235,563,519 shares of common stock 438 — 438 Exchange of convertible senior notes for 73,389,094 shares of common stock 134 — 134 Equity component of convertible notes repurchases (2 ) — (2 ) Stock-based compensation 8 — 8 Dividends on preferred stock (23 ) — (23 ) Balance, end of period 16,975 — 16,975 ACCUMULATED DEFICIT: Balance, beginning of period (15,171 ) 1,336 (13,835 ) Net income (loss) attributable to Chesapeake 144 (205 ) (61 ) Balance, end of period (15,027 ) 1,131 (13,896 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (5 ) — (5 ) Hedging activity 8 — 8 Balance, end of period 3 — 3 TREASURY STOCK – COMMON: Balance, beginning of period (36 ) — (36 ) Purchase of 53,337 shares for company benefit plans — — — Release of 37,301 shares from company benefit plans — — — Balance, end of period (36 ) — (36 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY 3,565 1,131 4,696 NONCONTROLLING INTERESTS: Balance, beginning of period 122 (83 ) 39 Net loss attributable to noncontrolling interests — — — Distributions to noncontrolling interest owners — — — Balance, end of period 122 (83 ) 39 TOTAL EQUITY $ 3,687 $ 1,048 $ 4,735 Three Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning and end of period $ 1,671 $ — $ 1,671 COMMON STOCK: Balance, beginning of period 9 — 9 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 14,408 — 14,408 Stock-based compensation 9 — 9 Dividends on preferred stock (23 ) — (23 ) Balance, end of period 14,394 — 14,394 ACCUMULATED DEFICIT: Balance, beginning of period (16,257 ) 1,887 (14,370 ) Net income (loss) attributable to Chesapeake 84 (230 ) (146 ) Balance, end of period (16,173 ) 1,657 (14,516 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (40 ) — (40 ) Hedging activity 8 — 8 Balance, end of period (32 ) — (32 ) TREASURY STOCK – COMMON: Balance, beginning of period (31 ) — (31 ) Purchase of 30,509 shares for company benefit plans — — — Release of 41,617 shares from company benefit plans — — — Balance, end of period (31 ) — (31 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY (DEFICIT) (162 ) 1,657 1,495 NONCONTROLLING INTERESTS: Balance, beginning of period 123 (81 ) 42 Net income attributable to noncontrolling interests 1 (1 ) — Distributions to noncontrolling interest owners (2 ) — (2 ) Balance, end of period 122 (82 ) 40 TOTAL EQUITY (DEFICIT) $ (40 ) $ 1,575 $ 1,535 Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning of period $ 1,671 $ — $ 1,671 Exchange of 40,000 shares of preferred stock for common stock (40 ) — (40 ) Balance, end of period 1,631 — 1,631 COMMON STOCK: Balance, beginning of period 9 — 9 Common shares issued for WildHorse Merger 7 — 7 Exchange of senior notes and convertible senior notes 3 — 3 Exchange of preferred stock — — — Balance, end of period 19 — 19 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 14,378 — 14,378 Common shares issued for WildHorse Merger 2,030 — 2,030 Exchange of preferred stock for 10,367,950 shares of common stock 40 — 40 Exchange of senior notes for 235,563,519 shares of common stock 438 — 438 Exchange of convertible senior notes for 73,389,094 shares of common stock 134 — 134 Equity component of convertible notes repurchases (2 ) — (2 ) Stock-based compensation 26 — 26 Dividends on preferred stock (69 ) — (69 ) Balance, end of period 16,975 — 16,975 ACCUMULATED DEFICIT: Balance, beginning of period (15,660 ) 1,748 (13,912 ) Net income attributable to Chesapeake 633 (617 ) 16 Balance, end of period (15,027 ) 1,131 (13,896 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (23 ) — (23 ) Hedging activity 26 — 26 Balance, end of period 3 — 3 TREASURY STOCK – COMMON: Balance, beginning of period (31 ) — (31 ) Purchase of 2,673,903 shares for company benefit plans (7 ) — (7 ) Release of 296,864 shares from company benefit plans 2 — 2 Balance, end of period (36 ) — (36 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY 3,565 1,131 4,696 NONCONTROLLING INTERESTS: Balance, beginning of period 123 (82 ) 41 Net income (loss) attributable to noncontrolling interests 1 (1 ) — Distributions to noncontrolling interest owners (2 ) — (2 ) Balance, end of period 122 (83 ) 39 TOTAL EQUITY $ 3,687 $ 1,048 $ 4,735 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning and end of period $ 1,671 $ — $ 1,671 COMMON STOCK: Balance, beginning and end of period 9 — 9 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 14,437 — 14,437 Stock-based compensation 26 — 26 Dividends on preferred stock (69 ) — (69 ) Balance, end of period 14,394 — 14,394 ACCUMULATED DEFICIT: Balance, beginning of period (16,525 ) 2,395 (14,130 ) Net income (loss) attributable to Chesapeake 360 (738 ) (378 ) Cumulative effect of accounting change (8 ) — (8 ) Balance, end of period (16,173 ) 1,657 (14,516 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (57 ) — (57 ) Hedging activity 25 — 25 Balance, end of period (32 ) — (32 ) TREASURY STOCK – COMMON: Balance, beginning of period (31 ) — (31 ) Purchase of 1,499,033 shares for company benefit plans (4 ) — (4 ) Release of 431,474 shares from company benefit plans 4 — 4 Balance, end of period (31 ) — (31 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY (DEFICIT) (162 ) 1,657 1,495 NONCONTROLLING INTERESTS: Balance, beginning of period 124 (80 ) 44 Net income attributable to noncontrolling interests 3 (2 ) 1 Distributions to noncontrolling interest owners (5 ) — (5 ) Balance, end of period 122 (82 ) 40 TOTAL EQUITY (DEFICIT) $ (40 ) $ 1,575 $ 1,535 |
Oil and Natural Gas Property Tr
Oil and Natural Gas Property Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Oil and Natural Gas Property Transactions | Oil and Natural Gas Property Transactions WildHorse Acquisition On February 1, 2019, we acquired WildHorse Resource Development Corporation (“WildHorse”), an oil and gas company with operations in the Eagle Ford Shale and Austin Chalk formations in southeast Texas for approximately 717.4 million shares of our common stock and $381 million in cash. We funded the cash portion of the consideration through borrowings under the Chesapeake revolving credit facility. In connection with the closing, we acquired all of WildHorse’s debt. See Note 6 for additional information on the acquired debt. Purchase Price Allocation We have accounted for the acquisition of WildHorse and its corresponding merger (the “Merger”) with and into our wholly owned subsidiary, Brazos Valley Longhorn, L.L.C. (“Brazos Valley Longhorn” or “BVL”), as a business combination, using the acquisition method. The following table represents the preliminary allocation of the total purchase price of WildHorse to the identifiable assets acquired and the liabilities assumed based on the fair values as of the acquisition date. Certain data necessary to complete the purchase price allocation is not yet available, and includes, but is not limited to, valuation of pre-acquisition contingencies and final appraisals of assets acquired and liabilities assumed. We expect to complete the purchase price allocation during the 12-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate. Preliminary Purchase Price Allocation ($ in millions) Consideration: Cash $ 381 Fair value of Chesapeake’s common stock issued in the Merger (a) 2,037 Total consideration $ 2,418 Fair Value of Liabilities Assumed: Current liabilities $ 166 Long-term debt 1,379 Deferred tax liabilities 314 Other long-term liabilities 36 Amounts attributable to liabilities assumed $ 1,895 Fair Value of Assets Acquired: Cash and cash equivalents $ 28 Other current assets 128 Proved oil and natural gas properties 3,264 Unproved properties 756 Other property and equipment 77 Other long-term assets 60 Amounts attributable to assets acquired $ 4,313 Total identifiable net assets $ 2,418 ___________________________________________ (a) Based on 717,376,170 Chesapeake common shares issued at closing at $2.84 per share (closing price as of February 1, 2019). We included in our condensed consolidated statements of operations revenues of $543 million , direct operating expenses of $579 million and other expense of $67 million related to the WildHorse business for the period from February 1, 2019 to September 30, 2019. Pro Forma Financial Information The following unaudited pro forma financial information for the nine months ended September 30, 2019 and three and nine months ended September 30, 2018, respectively, is based on our historical consolidated financial statements adjusted to reflect as if the WildHorse acquisition had occurred on January 1, 2018. The information below reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including adjustments to conform the classification of expenses in WildHorse’s statements of operations to our classification for similar expenses and the estimated tax impact of pro forma adjustments. Three Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 ($ in millions except per share data) Revenues $ 2,607 $ 6,661 $ 7,692 Net income (loss) available to common stockholders $ (199 ) $ (85 ) $ (543 ) Earnings per common share: Basic $ (0.12 ) $ (0.05 ) $ (0.33 ) Diluted $ (0.12 ) $ (0.05 ) $ (0.33 ) This unaudited pro forma information has been derived from historical information. The unaudited pro forma financial information is not necessarily indicative of what actually would have occurred if the acquisition had been completed as of the beginning of the periods presented, nor is it necessarily indicative of future results. Divestitures In the Prior Period, we sold portions of our acreage, producing properties and other related property and equipment in the Mid-Continent, including our Mississippian Lime assets, for approximately $491 million , subject to certain customary closing adjustments. Included in the sales were approximately 238,500 net acres and interests in approximately 3,200 wells. Also, in the Current Quarter, the Prior Quarter, the Current Period and the Prior Period, we received proceeds of approximately $28 million , $8 million , $110 million and $31 million |
Capitalized Exploratory Well Co
Capitalized Exploratory Well Costs | 9 Months Ended |
Sep. 30, 2019 | |
Extractive Industries [Abstract] | |
Capitalized Exploratory Well Costs | Capitalized Exploratory Well Costs A summary of the changes in our capitalized well costs for the Current Period is detailed below. Additions pending the determination of proved reserves excludes amounts capitalized and subsequently charged to expense within the same year. 2019 ($ in millions) Balance as of January 1 $ 36 Additions pending the determination of proved reserves 14 Divestitures and other — Reclassifications to proved properties (18 ) Charges to exploration expense (8 ) Balance as of September 30 $ 24 As of September 30, 2019, approximately $1 million |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share (EPS) is calculated using the weighted average number of common shares outstanding during the period and includes the effect of any participating securities as appropriate. Participating securities consist of unvested restricted stock issued to our employees and non-employee directors that provide dividend rights. Diluted EPS is calculated assuming the issuance of common shares for all potentially dilutive securities, provided the effect is not antidilutive. For all periods presented, our convertible senior notes did not have a dilutive effect and, therefore, were excluded from the calculation of diluted EPS. Shares of common stock for the following securities were excluded from the calculation of diluted EPS as the effect was antidilutive: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in millions) Common stock equivalent of our preferred stock outstanding 58 60 58 60 Common stock equivalent of our convertible senior notes outstanding 124 146 124 146 Common stock equivalent of our preferred stock outstanding prior to exchange 1 — 1 — Participating securities — 2 — 1 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Our long-term debt consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Principal Amount Carrying Principal Carrying ($ in millions) Floating rate senior notes due 2019 — — 380 380 6.625% senior notes due 2020 208 208 437 437 6.875% senior notes due 2020 93 93 227 227 6.125% senior notes due 2021 167 167 548 548 5.375% senior notes due 2021 127 127 267 267 4.875% senior notes due 2022 338 338 451 451 5.75% senior notes due 2023 209 209 338 338 7.00% senior notes due 2024 850 850 850 850 6.875% senior notes due 2025 (a) 618 621 — — 8.00% senior notes due 2025 1,245 1,237 1,300 1,291 5.5% convertible senior notes due 2026 (b) 1,064 758 1,250 866 7.5% senior notes due 2026 400 400 400 400 8.00% senior notes due 2026 919 885 — — 8.00% senior notes due 2027 1,090 1,089 1,300 1,299 2.25% contingent convertible senior notes due 2038 — — 1 1 Chesapeake revolving credit facility 1,504 1,504 419 419 BVL revolving credit facility (a) 900 900 — — Debt issuance costs — (46 ) — (53 ) Interest rate derivatives — 1 — 1 Total debt, net 9,732 9,341 8,168 7,722 Less current maturities of long-term debt, net (c) (208 ) (208 ) (381 ) (381 ) Total long-term debt, net $ 9,524 $ 9,133 $ 7,787 $ 7,341 ___________________________________________ (a) On February 1, 2019, we acquired the debt of WildHorse which consisted of 6.875% Senior Notes due 2025 and a revolving credit facility. We now refer to this debt as our BVL Senior Notes and our BVL revolving credit facility, respectively. See further discussion below. (b) We are required to account for the liability and equity components of our convertible debt instrument separately and to reflect interest expense through the first demand repurchase date, as applicable, at the interest rate of similar nonconvertible debt at the time of issuance. The applicable rate for our 5.5% Convertible Senior Notes due 2026 is 11.5% . Prior to maturity under certain circumstances and at the holder’s option, the notes are convertible. During the Current Quarter, the price of our common stock was below the threshold level for conversion and, as a result, the holders do not have the option to convert their notes in the fourth quarter of 2019. (c) As of September 30, 2019, net current maturities of long-term debt includes our 6.625% Senior Notes due August 2020. Chesapeake Revolving Credit Facility Our Chesapeake revolving credit facility matures in September 2023 and the current aggregate commitment of the lenders and borrowing base under the facility is $3.0 billion . The revolving credit facility provides for an accordion feature, pursuant to which the aggregate commitments thereunder may be increased to up to $4.0 billion from time to time, subject to agreement of the participating lenders and certain other customary conditions. Scheduled borrowing base redeterminations will continue to occur semiannually. Our borrowing base was reaffirmed on November 1, 2019, and our next borrowing base redetermination is scheduled for the second quarter of 2020. As of September 30, 2019 , we had outstanding borrowings of $1.504 billion under the Chesapeake revolving credit facility and had used $53 million of the Chesapeake revolving credit facility for various letters of credit. On February 1, 2019, we entered into a first amendment to our Chesapeake credit agreement. Among other things, the amendment (i) designated our subsidiary, Brazos Valley Longhorn, and its subsidiaries as unrestricted subsidiaries under the Chesapeake revolving credit facility and (ii) expressly permitted our initial investment in WildHorse under the limitations on investments covenant. As a result of BVL and its subsidiaries being designated as unrestricted subsidiaries under the Chesapeake revolving credit facility, transactions between BVL and its subsidiaries, on the one hand, and Chesapeake and its subsidiaries (other than BVL and its subsidiaries), on the other hand, are required to be on an arm’s-length basis, subject to certain exceptions, and Chesapeake is limited in the amount of investments it can make in BVL and its subsidiaries. Borrowings under the Chesapeake revolving credit facility bear interest at an alternative base rate (ABR) or LIBOR, at our election, plus an applicable margin ranging from 0.50% - 2.00% per annum for ABR loans and 1.50% - 3.00% per annum for LIBOR loans, depending on the percentage of the borrowing base then being utilized and whether our leverage ratio exceeds 4.00 to 1.00. In July 2017, the UK's Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR as a benchmark by the end of 2021. At the present time, the Chesapeake revolving credit facility has a term that extends beyond 2021. The Chesapeake revolving credit facility provides for a mechanism to amend the facility to reflect the establishment of an alternate rate of interest upon the occurrence of certain events related to the phase-out of LIBOR. However, we have not yet pursued any technical amendment or other contractual alternative to address this matter. We are currently evaluating the potential impact of the eventual replacement of the LIBOR interest rate. The Chesapeake revolving credit facility is subject to various financial and other covenants. The terms of the Chesapeake credit agreement include covenants limiting, among other things, our ability to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and similar fundamental changes, make restricted payments, make investments in unrestricted subsidiaries and enter into transactions with affiliates. The Chesapeake credit agreement contains financial covenants that require us to maintain (i) a leverage ratio, which is the ratio of consolidated indebtedness to consolidated EBITDAX, each as defined in the Chesapeake credit agreement to exclude amounts associated with unrestricted subsidiaries, of not more than 5.50 to 1 through the fiscal quarter ending September 30, 2019, which threshold decreases by 25 basis points each quarter until it reaches 4.00 to 1.00 for the fiscal quarter ending March 31, 2021 and every quarter thereafter, (ii) a secured leverage ratio of not more than 2.50 to 1.00 until the later of (x) the fiscal quarter ending March 31, 2021 or (y) the first fiscal quarter in which the Company’s leverage ratio does not exceed 4.00 to 1.00 and (iii) a fixed charge coverage ratio of not less than 2.00 to 1.00 through the fiscal quarter ending December 31, 2019; not less than 2.25 to 1.00 through the fiscal quarter ending June 30, 2020; and not less than 2.50 to 1.00 for the fiscal quarter ended September 30, 2020 and every quarter thereafter. As of September 30, 2019 , we were in compliance with all applicable financial covenants under the credit agreement and we were able to borrow up to the full availability under the Chesapeake revolving credit facility and had $1.443 billion of borrowing capacity thereunder. Fluctuations in oil and natural gas prices have a material impact on our financial position, results of operations, cash flows and quantities of oil, natural gas and NGL reserves that may be economically produced. Historically, oil and natural gas prices have been volatile, and may be subject to wide fluctuations in the future. If continued depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant, our ability to comply with the leverage ratio covenant during the next 12 months will be adversely affected which raises substantial doubt about our ability to continue as a going concern. Failure to comply with this covenant, if not waived, would result in an event of default under our Chesapeake revolving credit facility, the potential acceleration of outstanding debt thereunder and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness. We are actively pursuing with support from the Board of Directors a variety of transactions and cost-cutting measures, including but not limited to, reduction in corporate discretionary expenditures, refinancing transactions by us or our subsidiaries, capital exchange transactions, asset divestitures, reductions in capital expenditures by approximately 30% in 2020 and operational efficiencies. We believe it is probable that these measures, as we continue to implement them, will enable us to comply with our leverage ratio covenant. BVL Revolving Credit Facility In connection with the acquisition of WildHorse, our subsidiary, BVL, became the borrower under the WildHorse revolving credit facility (as amended, the “BVL revolving credit facility”). The BVL revolving credit facility has a maximum credit amount of $2.0 billion , with current aggregate commitments and a borrowing base of $1.3 billion . The BVL revolving credit facility matures in December 2021. Scheduled borrowing base redeterminations occur on at least a semi-annual basis, primarily on the basis of estimated proved reserves. The scheduled borrowing base redetermination for the fourth quarter of 2019 is ongoing, and there can be no assurance that the borrowing base will remain at $1.3 billion . As of September 30, 2019, BVL had outstanding borrowings of $900 million under its credit agreement. The BVL revolving credit facility is guaranteed by certain of BVL’s subsidiaries (the “BVL Guarantors”) and is required to be secured, and is secured, by substantially all of the assets of BVL and the BVL Guarantors, including mortgages on not less than 85% of the proved reserves of their oil and gas properties. On February 1, 2019, BVL, as successor by merger to WildHorse, entered into a sixth amendment to the BVL credit agreement. Among other things, the amendment (i) amended the merger covenant and the definition of change of control to permit our acquisition of WildHorse and (ii) permits borrowings under the BVL revolving credit facility to be used to redeem or repurchase the BVL Senior Notes so long as certain conditions are met. The obligations under the BVL revolving credit facility are the senior secured obligations of BVL and the BVL Guarantors. The obligations under the BVL revolving credit facility are not obligations of Chesapeake or any of its other subsidiaries. The obligations under the BVL revolving credit facility rank equally in right of payment with all other senior secured indebtedness of BVL and the other BVL Guarantors, and are effectively senior to the BVL and the BVL Guarantors’ senior unsecured indebtedness, including their obligations under the BVL Senior Notes, to the extent of the value of the collateral securing the BVL revolving credit facility. The BVL revolving credit facility is used for the liquidity and expenses of BVL and its subsidiaries and not Chesapeake and its other subsidiaries. Revolving loans under the BVL revolving credit facility bear interest at an ABR, Eurodollar rate or LIBOR at BVL’s election, plus an applicable margin (ranging from 0.50% - 1.50% per annum for ABR loans, 1.50% - 2.50% per annum for Eurodollar loans and 1.50% - 2.50% per annum for LIBOR Market Index loans), depending on Brazos Valley Longhorn’s total commitment usage. The unused portion of the total commitments are subject to a commitment fee that varies from 0.375% to 0.500% , depending on BVL’s total commitment usage. In July 2017, the UK's Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR as a benchmark by the end of 2021. At the present time, the BVL revolving credit facility has a stated maturity date in December 2021. Under the terms of the BVL revolving credit facility, the occurrence of certain events related to the phase-out of LIBOR would make Eurodollar borrowings unavailable and require BVL to borrow at the ABR rate or at an alternate rate of interest determined by the lenders under the BVL revolving credit facility as their cost of funds. We are currently evaluating the potential impact of the eventual phasing-out of LIBOR, including the amendment of the BVL revolving credit facility to implement a market-standard approach to the transition from LIBOR. The terms of the BVL credit agreement include covenants limiting, among other things, the ability of BVL and its restricted subsidiaries (as defined in the BVL credit agreement) to incur additional indebtedness, make investments or loans, incur liens, consummate mergers or similar fundamental changes, make restricted payments, including distributions to Chesapeake, and enter into transactions with affiliates, including Chesapeake and its other subsidiaries. The BVL credit agreement also contains financial covenants that require BVL to maintain (i)(x) if there are no loans outstanding thereunder, a ratio of net debt to EBITDAX (as defined in the BVL credit agreement) of not more than 4.00 to 1.00 as of the last day of each fiscal quarter or (y) if there are such loans outstanding, a ratio of total funded debt to EBITDAX of not more than 4.00 to 1.00 as of the last day of each fiscal quarter and (ii) a ratio of current assets (including availability under the BVL revolving credit facility) to current liabilities of not less than 1.00 to 1.00 as of the last day of each fiscal quarter. As of September 30, 2019, we were in compliance with all applicable financial covenants under the BVL credit agreement and we were able to borrow up to the full availability under the BVL revolving credit facility. Chesapeake Senior Notes In the Current Quarter, we privately negotiated exchanges of approximately $507 million principal amount of our outstanding senior notes for 235,563,519 shares of common stock and $186 million principal amount of our outstanding convertible senior notes for 73,389,094 shares of common stock. We recorded an aggregate net gain of approximately $64 million associated with the exchanges. In the Current Period, we issued at par approximately $919 million of 8.00% Senior Notes due 2026 (“2026 notes”) pursuant to a private exchange offer for the following outstanding senior unsecured notes: Notes Exchanged ($ in millions) 6.625% senior notes due 2020 $ 229 6.875% senior notes due 2020 134 6.125% senior notes due 2021 381 5.375% senior notes due 2021 140 Total $ 884 We may redeem some or all of the 2026 notes at any time prior to March 15, 2022 at a price equal to 100% of the principal amount of the notes to be redeemed plus a “make-whole” premium. At any time prior to March 15, 2022, we also may redeem up to 35% of the aggregate principal amount of each series of notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a specified redemption price. In addition, we may redeem some or all of the 2026 notes at any time on or after March 15, 2022 at the redemption prices in accordance with the terms of the notes, the indenture and supplemental indenture governing the notes. These senior notes are unsecured obligations of Chesapeake and rank equally in right of payment with all of our other existing and future senior unsecured indebtedness and rank senior in right of payment to all of our future subordinated indebtedness. Our obligations under the senior notes are jointly and severally, fully and unconditionally guaranteed by all of our wholly owned subsidiaries that guarantee the Chesapeake revolving credit facility and certain other unsecured senior notes. We accounted for the exchange as a modification to existing debt and no gain or loss was recognized. In the Current Period, we repaid upon maturity $380 million principal amount of our Floating Rate Senior Notes due April 2019 with borrowings from our Chesapeake revolving credit facility. BVL Senior Notes As a result of the completion of the acquisition of WildHorse, BVL assumed the obligations under WildHorse’s $700 million aggregate principal amount of 6.875% Senior Notes due 2025 (the “BVL Senior Notes”) and Brazos Valley Longhorn Finance Corp. (“BVL Finance Corp.”), a wholly owned subsidiary of BVL, became a co-issuer of the BVL Senior Notes. On February 1, 2019, BVL, as successor by merger to WildHorse, and BVL Finance Corp. entered into a fourth supplemental indenture (the “BVL supplemental indenture”) to the indenture governing the BVL Senior Notes (as supplemented, the “BVL indenture”). Pursuant to the BVL supplemental indenture, (i) BVL assumed the rights and obligations of WildHorse as issuer under the BVL indenture and (ii) BVL Finance Corp. was named as a co-issuer of the BVL Senior Notes under the BVL indenture. The BVL Senior Notes are the senior unsecured obligations of BVL, BVL Finance Corp. and the other BVL Guarantors. The BVL Senior Notes are not obligations of Chesapeake or any of its other subsidiaries. The BVL Senior Notes rank equally in right of payment with all other senior unsecured indebtedness of BVL, BVL Finance Corp. and the other BVL Guarantors, and will be effectively subordinated to BVL’s, BVL Finance Corp.’s and the other BVL Guarantors’ senior secured indebtedness, including their obligations under the BVL revolving credit facility, to the extent of the value of the collateral securing such indebtedness. The BVL indenture contains customary reporting covenants (including furnishing quarterly and annual reports to the holders of the BVL Senior Notes) and restrictive covenants that, among other things, limit the ability of BVL and its subsidiaries to: (i) pay dividends on, purchase or redeem BVL’s equity interests or purchase or redeem subordinated debt, unless such distributions, purchases or redemptions are permitted by certain exceptions, including for amounts based on BVL’s operating results, subject to the satisfaction of certain conditions, and a $25 million basket; (ii) make certain investments; (iii) incur or guarantee additional indebtedness or issue certain types of equity securities; (iv) create or incur certain secured debt; (v) sell assets; (vi) consolidate, merge or transfer all or substantially all of BVL’s assets; (vii) enter into agreements that restrict distributions or other payments from BVL’s restricted subsidiaries to BVL; (viii) engage in transactions with affiliates, including Chesapeake and its other subsidiaries; and (ix) create unrestricted subsidiaries. These covenants are subject to a number of important qualifications and limitations. In addition, most of the covenants will be terminated before the BVL Senior Notes mature if at any time no default or event of default exists under the BVL indenture and the BVL Senior Notes receive an investment grade rating from both of two specified ratings agencies. The BVL indenture also contains customary events of default. The BVL credit agreement and the BVL indenture constrain the ability of BVL and its subsidiaries to make distributions or otherwise provide funds to, or guarantee the obligations of, Chesapeake and its other subsidiaries. The provisions of the BVL credit agreement and the BVL indenture require that all transactions between BVL and its subsidiaries, on the one hand, and Chesapeake and its other subsidiaries, on the other hand, be on an arm's-length basis, subject to certain exceptions. In the Current Quarter, we repurchased approximately $82 million principal amount of the BVL Senior Notes for $76 million and recorded a $6 million gain. Fair Value of Debt We estimate the fair value of our senior notes based on the market value of our publicly traded debt as determined based on the yield of our senior notes (Level 1). The fair value of all other debt is based on a market approach using estimates provided by an independent investment financial data services firm (Level 2). Fair value is compared to the carrying value, excluding the impact of interest rate derivatives, in the table below: September 30, 2019 December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value ($ in millions) Short-term debt (Level 1) $ 208 $ 208 $ 381 $ 379 Long-term debt (Level 1) $ 2,790 $ 2,245 $ 3,495 $ 3,173 Long-term debt (Level 2) $ 6,343 $ 4,980 $ 3,846 $ 3,644 |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments There have been no material developments in previously reported legal or environmental contingencies or commitments other than the items discussed below. For a discussion of commitments and contingencies, see “Contingencies and Commitments,” Note 4 to the Consolidated Financial Statements in our 2018 Form 10-K. Contingencies Litigation and Regulatory Proceedings We are involved in a number of litigation and regulatory proceedings including those described below. Many of these proceedings are in early stages, and many of them seek or may seek damages and penalties, the amount of which is indeterminate. Our total accrued liability in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case or proceeding, our experience and the experience of others in similar cases or proceedings, and the opinions and views of legal counsel. Significant judgment is required in making these estimates and our final liabilities may ultimately be materially different. Business Operations. We are involved in various lawsuits and disputes incidental to our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions. We and other natural gas producers have been named in various lawsuits alleging underpayment of royalties and other shares of the proceeds of production. The suits against us allege, among other things, that we used below-market prices, made improper deductions, utilized improper measurement techniques, entered into arrangements with affiliates that resulted in underpayment of amounts owed in connection with the production and sale of natural gas and NGL, or similar theories. These lawsuits include cases filed by individual royalty owners and putative class actions, some of which seek to certify a statewide class. The lawsuits seek compensatory, consequential, treble, and punitive damages, restitution and disgorgement of profits, declaratory and injunctive relief regarding our payment practices, pre-and post-judgment interest, and attorney’s fees and costs. Royalty plaintiffs have varying provisions in their respective leases, oil and gas law varies from state to state, and royalty owners and producers differ in their interpretation of the legal effect of lease provisions governing royalty calculations. We have resolved a number of these claims through negotiated settlements of past and future royalty obligations and have prevailed in various other lawsuits. We are currently defending numerous lawsuits seeking damages with respect to underpayment of royalties or other shares of the proceeds of production in multiple states where we have operated, including those discussed below. On December 9, 2015, the Commonwealth of Pennsylvania, by the Office of Attorney General, filed a lawsuit in the Bradford County Court of Common Pleas related to royalty underpayment and lease acquisition and accounting practices with respect to properties in Pennsylvania. The lawsuit, which primarily relates to the Marcellus Shale and Utica Shale, alleges that we violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) by making improper deductions and entering into arrangements with affiliates that resulted in underpayment of royalties. The lawsuit includes other UTPCPL claims and antitrust claims, including that a joint exploration agreement to which we are a party established unlawful market allocation for the acquisition of leases. The lawsuit seeks statutory restitution, civil penalties and costs, as well as a temporary injunction from exploration and drilling activities in Pennsylvania until restitution, penalties and costs have been paid, and a permanent injunction from further violations of the UTPCPL. Putative statewide class actions in Pennsylvania and Ohio and purported class arbitrations in Pennsylvania have been filed on behalf of royalty owners asserting various claims for damages related to alleged underpayment of royalties as a result of the divestiture of substantially all of our midstream business and most of our gathering assets in 2012 and 2013. These cases include claims for violation of and conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act and for an unlawful market allocation agreement for mineral rights, intentional interference with contractual relations, and violations of antitrust laws related to purported markets for gas mineral rights, operating rights and gas gathering sources. These lawsuits seek in aggregate compensatory, consequential, treble, and punitive damages, restitution and disgorgement of profits, declaratory and injunctive relief regarding our royalty payment practices, pre-and post-judgment interest, and attorney’s fees and costs. On December 20, 2017 and August 9, 2018, we reached tentative settlements to resolve substantially all Pennsylvania civil royalty cases for a total of approximately $35 million . We believe losses are reasonably possible in certain of the pending royalty cases for which we have not accrued a loss contingency, but we are currently unable to estimate an amount or range of loss or the impact the actions could have on our future results of operations or cash flows. Uncertainties in pending royalty cases generally include the complex nature of the claims and defenses, the potential size of the class in class actions, the scope and types of the properties and agreements involved, and the applicable production years. On July 24, 2018, Healthcare of Ontario Pension Plan (HOOPP) filed a demand for arbitration with the American Arbitration Association regarding HOOPP’s purchase of our interest in Chaparral Energy, Inc. stock for $215 million on January 5, 2014. HOOPP claims that we engaged in material misrepresentations and fraud, and that we violated the Securities Exchange Act of 1934 (the “Exchange Act”) and Oklahoma Uniform Securities Act. HOOPP seeks either rescission or $215 million in monetary damages, and in either case, interest, attorney’s fees, disgorgement and punitive damages. We intend to vigorously defend these claims. In February 2019, a putative class action lawsuit was filed in the District Court of Dallas County, Texas against FTS International, Inc. (FTSI), certain investment banks, FTSI’s directors including certain of our officers and certain shareholders of FTSI including us. The lawsuit alleges various violations of Sections 11 (with respect to certain of our officers in their capacities as directors of FTSI) and 15 (with respect to such officers and us) of the Securities Act of 1933 in connection with public disclosure made during the initial public offering of FTSI. The suit seeks damages in excess of $1,000,000 and attorneys’ fees and other expenses. We intend to vigorously defend these claims. Environmental Contingencies The nature of the oil and gas business carries with it certain environmental risks for us and our subsidiaries. We have implemented various policies, programs, procedures, training and audits to reduce and mitigate such environmental risks. We conduct periodic reviews, on a company-wide basis, to assess changes in our environmental risk profile. Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable. We manage our exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and address the potential liability. Depending on the extent of an identified environmental concern, we may, among other things, exclude a property from the transaction, require the seller to remediate the property to our satisfaction in an acquisition or agree to assume liability for the remediation of the property. We are named as a defendant in numerous lawsuits in Oklahoma alleging that we and other companies have engaged in activities that have caused earthquakes. These lawsuits seek compensation for injury to real and personal property, diminution of property value, economic losses due to business interruption, interference with the use and enjoyment of property, annoyance and inconvenience, personal injury and emotional distress. In addition, they seek the reimbursement of insurance premiums and the award of punitive damages, attorneys’ fees, costs, expenses and interest. We intend to vigorously defend these claims. We previously disclosed ongoing discussions between our subsidiary, Chesapeake Appalachia, L.L.C. ( “ CALLC ” ) and the Pennsylvania Department of Environmental Protection related to gas migration in the vicinity of certain of our wells in Bradford County. Those concerns were resolved by the parties on August 28, 2019. Pursuant to the settlement, CALLC paid a civil penalty of less than $100,000 . Other Matters Based on management’s current assessment, we are of the opinion that no pending or threatened lawsuit or dispute relating to our business operations is likely to have a material adverse effect on our future consolidated financial position, results of operations or cash flows. The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates. Commitments Gathering, Processing and Transportation Agreements We have contractual commitments with midstream service companies and pipeline carriers for future gathering, processing and transportation of oil, natural gas and NGL to move certain of our production to market. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Commitments related to gathering, processing and transportation agreements are not recorded as obligations in the accompanying condensed consolidated balance sheets; however, they are reflected in our estimates of proved reserves. The aggregate undiscounted commitments under our gathering, processing and transportation agreements, excluding any reimbursement from working interest and royalty interest owners, credits for third-party volumes or future costs under cost-of-service agreements, are presented below: September 30, ($ in millions) Remainder of 2019 $ 201 2020 764 2021 673 2022 570 2023 480 2024 – 2035 2,731 Total $ 5,419 In addition, we have entered into long-term agreements for certain natural gas gathering and related services within specified acreage dedication areas in exchange for cost-of-service based fees redetermined annually, or tiered fees based on volumes delivered relative to scheduled volumes. Future gathering fees may vary with the applicable agreement. |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other Liabilities Other current liabilities as of September 30, 2019 and December 31, 2018 are detailed below: September 30, December 31, ($ in millions) Revenues and royalties due others $ 429 $ 687 Accrued drilling and production costs 474 258 Joint interest prepayments received 49 73 VPP deferred revenue (a) 56 59 Accrued compensation and benefits 156 202 Other accrued taxes 141 108 Other 185 212 Total other current liabilities $ 1,490 $ 1,599 Other long-term liabilities as of September 30, 2019 and December 31, 2018 are detailed below: September 30, December 31, ($ in millions) VPP deferred revenue (a) $ 22 $ 63 Unrecognized tax benefits 55 53 Other 109 103 Total other long-term liabilities $ 186 $ 219 ____________________________________________ (a) At the inception of our volumetric production payment (VPP) agreements, we (i) removed the proved reserves associated with the VPP, (ii) recognized VPP proceeds as deferred revenue which are being amortized on a unit-of-production basis to other revenue over the term of the VPP, (iii) retained responsibility for the production costs and capital costs related to VPP interests and (iv) ceased recognizing production associated with the VPP volumes. The remaining deferred revenue balance will be recognized in other revenues in the consolidated statement of operations through 2021, assuming the related VPP production volumes are delivered as scheduled. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases We are a lessee under various agreements for compressors, office space, vehicles and other equipment. As of September 30, 2019, these leases have remaining terms ranging from one month to 7.3 years . Certain of our lease agreements include options to renew the lease, terminate the lease early or purchase the underlying asset at the end of the lease. We determine the lease term at the lease commencement date as the non-cancelable period of the lease, including options to extend or terminate the lease when we are reasonably certain to exercise the option. The company’s vehicles are the only leases with renewal options that we are reasonably certain to exercise. The renewals are reflected in the ROU asset and lease liability balances. Upon adoption of ASC 842 on January 1, 2019, we recognized a nominal operating lease liability and a nominal related ROU asset related to vehicles we lease. On February 1, 2019, we acquired WildHorse and, as part of the purchase price allocation, we recognized additional operating lease liabilities of $40 million , a related ROU asset of $38 million , and lease incentives of $2 million related to two office space leases, a long-term hydraulic fracturing agreement and other equipment leases. Regarding our long-term hydraulic fracturing agreements, we made a policy election to treat both lease and non-lease components as a single lease component. In 2018, we sold our wholly owned subsidiary, Midcon Compression, L.L.C., to a third party and subsequently leased back some natural gas compressors for 38 months . The lease is accounted for as a finance lease liability. The following table presents our ROU assets and lease liabilities as of September 30, 2019 . Financing Operating ($ in millions) ROU assets $ 20 $ 22 Lease liabilities: Current lease liabilities $ 9 $ 9 Long-term lease liabilities 11 16 Total lease liabilities $ 20 $ 25 Additional information for the Company’s operating and finance leases is presented below: Three Months Ended September 30, 2019 Nine Months Ended Lease cost: ($ in millions) Amortization of ROU assets $ 2 $ 6 Interest on lease liability — 1 Finance lease cost 2 7 Operating lease cost 7 24 Short-term lease cost 34 82 Total lease cost (a) $ 43 $ 113 Other information: Operating cash outflows from finance lease $ — $ 1 Operating cash outflows from operating leases $ 3 $ 8 Investing cash outflows from operating leases $ 38 $ 98 Financing cash outflows from finance lease $ 2 $ 6 Weighted-average remaining lease term - finance lease 2.25 years Weighted-average remaining lease term - operating leases 4.87 years Weighted-average discount rate - finance lease 7.50 % Weighted-average discount rate - operating leases 4.17 % ____________________________________________ (a) Includes $38 million and $98 million of capitalized lease costs for the Current Quarter and the Current Period, respectively. Maturity analysis of finance lease liabilities and operating lease liabilities are presented below: September 30, 2019 Financing Lease Operating Leases ($ in millions) Remainder of 2019 $ 3 $ 2 2020 10 9 2021 10 5 2022 — 3 2023 — 2 Thereafter — 7 Total lease payments 23 28 Less imputed interest (3 ) (3 ) Present value of lease liabilities 20 25 Less current maturities (9 ) (9 ) Present value of lease liabilities, less current maturities $ 11 $ 16 The aggregate undiscounted minimum future lease payments under previous lease accounting standard, ASC 840, are presented below: December 31, 2018 Capital Lease Operating Leases ($ in millions) 2019 $ 10 $ 3 2020 10 1 2021 10 — Total minimum lease payments $ 30 $ 4 |
Leases | Leases We are a lessee under various agreements for compressors, office space, vehicles and other equipment. As of September 30, 2019, these leases have remaining terms ranging from one month to 7.3 years . Certain of our lease agreements include options to renew the lease, terminate the lease early or purchase the underlying asset at the end of the lease. We determine the lease term at the lease commencement date as the non-cancelable period of the lease, including options to extend or terminate the lease when we are reasonably certain to exercise the option. The company’s vehicles are the only leases with renewal options that we are reasonably certain to exercise. The renewals are reflected in the ROU asset and lease liability balances. Upon adoption of ASC 842 on January 1, 2019, we recognized a nominal operating lease liability and a nominal related ROU asset related to vehicles we lease. On February 1, 2019, we acquired WildHorse and, as part of the purchase price allocation, we recognized additional operating lease liabilities of $40 million , a related ROU asset of $38 million , and lease incentives of $2 million related to two office space leases, a long-term hydraulic fracturing agreement and other equipment leases. Regarding our long-term hydraulic fracturing agreements, we made a policy election to treat both lease and non-lease components as a single lease component. In 2018, we sold our wholly owned subsidiary, Midcon Compression, L.L.C., to a third party and subsequently leased back some natural gas compressors for 38 months . The lease is accounted for as a finance lease liability. The following table presents our ROU assets and lease liabilities as of September 30, 2019 . Financing Operating ($ in millions) ROU assets $ 20 $ 22 Lease liabilities: Current lease liabilities $ 9 $ 9 Long-term lease liabilities 11 16 Total lease liabilities $ 20 $ 25 Additional information for the Company’s operating and finance leases is presented below: Three Months Ended September 30, 2019 Nine Months Ended Lease cost: ($ in millions) Amortization of ROU assets $ 2 $ 6 Interest on lease liability — 1 Finance lease cost 2 7 Operating lease cost 7 24 Short-term lease cost 34 82 Total lease cost (a) $ 43 $ 113 Other information: Operating cash outflows from finance lease $ — $ 1 Operating cash outflows from operating leases $ 3 $ 8 Investing cash outflows from operating leases $ 38 $ 98 Financing cash outflows from finance lease $ 2 $ 6 Weighted-average remaining lease term - finance lease 2.25 years Weighted-average remaining lease term - operating leases 4.87 years Weighted-average discount rate - finance lease 7.50 % Weighted-average discount rate - operating leases 4.17 % ____________________________________________ (a) Includes $38 million and $98 million of capitalized lease costs for the Current Quarter and the Current Period, respectively. Maturity analysis of finance lease liabilities and operating lease liabilities are presented below: September 30, 2019 Financing Lease Operating Leases ($ in millions) Remainder of 2019 $ 3 $ 2 2020 10 9 2021 10 5 2022 — 3 2023 — 2 Thereafter — 7 Total lease payments 23 28 Less imputed interest (3 ) (3 ) Present value of lease liabilities 20 25 Less current maturities (9 ) (9 ) Present value of lease liabilities, less current maturities $ 11 $ 16 The aggregate undiscounted minimum future lease payments under previous lease accounting standard, ASC 840, are presented below: December 31, 2018 Capital Lease Operating Leases ($ in millions) 2019 $ 10 $ 3 2020 10 1 2021 10 — Total minimum lease payments $ 30 $ 4 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The FASB issued Revenue from Contracts with Customers (Topic 606) superseding virtually all existing revenue recognition guidance. We adopted this new standard in the Prior Period using the modified retrospective approach. We applied the new standard to all contracts that were not completed as of January 1, 2018 and reflected the aggregate effect of all modifications in determining and allocating the transaction price. The cumulative effect of adoption of $8 million in the Prior Period did not have a material impact on our consolidated financial statements. The following table shows revenue disaggregated by operating area and product type, for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period: Three Months Ended September 30, 2019 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 158 $ — $ 158 Haynesville — 129 — 129 Eagle Ford 282 32 22 336 Brazos Valley 194 10 5 209 Powder River Basin 97 16 5 118 Mid-Continent 40 8 5 53 Revenue from contracts with customers 613 353 37 1,003 Gains on oil, natural gas and NGL derivatives 124 43 — 167 Oil, natural gas and NGL revenue $ 737 $ 396 $ 37 $ 1,170 Marketing revenue from contracts with customers $ 603 $ 165 $ 37 $ 805 Other marketing revenue 80 4 — 84 Losses on oil, natural gas and NGL derivatives — — — — Marketing revenue $ 683 $ 169 $ 37 $ 889 Three Months Ended September 30, 2018 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 184 $ — $ 184 Haynesville — 195 — 195 Eagle Ford 399 36 58 493 Powder River Basin 78 17 13 108 Mid-Continent 58 15 12 85 Utica 59 131 76 266 Revenue from contracts with customers 594 578 159 1,331 Losses on oil, natural gas and NGL derivatives (100 ) (18 ) (14 ) (132 ) Oil, natural gas and NGL revenue $ 494 $ 560 $ 145 $ 1,199 Marketing revenue from contracts with customers 707 211 112 1,030 Other marketing revenue 119 70 — 189 Marketing revenue $ 826 $ 281 $ 112 $ 1,219 Nine Months Ended September 30, 2019 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 656 $ — $ 656 Haynesville — 494 — 494 Eagle Ford 962 117 89 1,168 Brazos Valley 513 23 12 548 Powder River Basin 273 59 23 355 Mid-Continent 131 34 26 191 Revenue from contracts with customers 1,879 1,383 150 3,412 Gains (losses) on oil, natural gas and NGL derivatives (49 ) 190 — 141 Oil, natural gas and NGL revenue $ 1,830 $ 1,573 $ 150 $ 3,553 Marketing revenue from contracts with customers $ 1,830 $ 741 $ 202 $ 2,773 Other marketing revenue 230 38 — 268 Losses on oil, natural gas and NGL derivatives — (3 ) — (3 ) Marketing revenue $ 2,060 $ 776 $ 202 $ 3,038 Nine Months Ended September 30, 2018 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 646 $ — $ 646 Haynesville 2 603 — 605 Eagle Ford 1,148 120 143 1,411 Powder River Basin 173 40 30 243 Mid-Continent 196 63 42 301 Utica 179 350 189 718 Revenue from contracts with customers 1,698 1,822 404 3,924 Losses on oil, natural gas and NGL derivatives (388 ) (85 ) (27 ) (500 ) Oil, natural gas and NGL revenue $ 1,310 $ 1,737 $ 377 $ 3,424 Marketing revenue from contracts with customers 2,125 733 324 3,182 Other marketing revenue 381 175 — 556 Marketing revenue $ 2,506 $ 908 $ 324 $ 3,738 Accounts Receivable Our accounts receivable are primarily from purchasers of oil, natural gas and NGL and from exploration and production companies that own interests in properties we operate. This industry concentration could affect our overall exposure to credit risk, either positively or negatively, because our purchasers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. We monitor the creditworthiness of all our counterparties and we generally require letters of credit or parent guarantees for receivables from parties deemed to have sub-standard credit, unless the credit risk can otherwise be mitigated. We utilize an allowance method in accounting for bad debt based on historical trends in addition to specifically identifying receivables that we believe may be uncollectible. Accounts receivable as of September 30, 2019 and December 31, 2018 are detailed below: September 30, 2019 December 31, 2018 ($ in millions) Oil, natural gas and NGL sales $ 644 $ 976 Joint interest 290 211 Other 64 77 Allowance for doubtful accounts (21 ) (17 ) Total accounts receivable, net $ 977 $ 1,247 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We estimate our annual effective tax rate for continuing operations in recording our quarterly income tax provision (or benefit) for the various jurisdictions in which we operate. The tax effects of statutory rate changes, significant unusual or infrequent items, and certain changes in the assessment of the realizability of deferred tax assets are excluded from the determination of our estimated annual effective tax rate as such items are recognized as discrete items in the quarter in which they occur. For the Current Quarter, our estimated annual effective tax rate is 0.0% as a result of maintaining a full valuation allowance against our net deferred tax asset. Taking into account our projected operating results for the fourth quarter of 2019, we project remaining in a net deferred tax asset position as of December 31, 2019. Based on all available positive and negative evidence, including projections of future taxable income, we believe it is more likely than not that these deferred tax assets will not be realized. A significant piece of objectively verifiable negative evidence evaluated is the cumulative loss incurred over the rolling thirty-six month period ended September 30, 2019. Such evidence limits our ability to consider various forms of subjective positive evidence, such as any projections for future growth and earnings. However, should we return to a level of sustained profitability, consideration will need to be given to projections of future taxable income to determine whether such projections provide an adequate source of taxable income for the realization of our deferred tax assets. A full valuation allowance was recorded against our net deferred tax asset position as of September 30, 2019 and December 31, 2018. On February 1, 2019, we completed the acquisition of WildHorse. For federal income tax purposes, the transaction qualified as a tax-free merger under Section 368 of the Internal Revenue Code of 1986, as amended, (the “Code”) and, as a result, we acquired carryover tax basis in WildHorse’s assets and liabilities. We recorded a net deferred tax liability of $314 million as part of the business combination accounting for WildHorse. As a consequence of maintaining a full valuation allowance against our net deferred tax asset, a partial release of the valuation allowance was recorded as a discrete income tax benefit of $314 million through the condensed consolidated statement of operations in the first quarter of 2019. The net deferred tax liability acquired includes deferred tax liabilities on plant, property and equipment and prepaid compensation totaling $401 million , partially offset by deferred tax assets totaling $87 million relating to federal net operating loss (NOL) carryforwards, disallowed interest carryforwards and certain other deferred tax assets. These carryforwards will be subject to an annual limitation under Section 382 of the Code of approximately $61 million . We determined that no separate valuation allowances were required to be established through business combination accounting against any of the individual deferred tax assets acquired. We are subject to U.S. federal income tax as well as income and capital taxes in various state jurisdictions in which we operate. We recorded an income tax benefit of $1 million for the Current Quarter and an income tax benefit of $315 million for the Current Period. The benefit for the Current Period was a result of the aforementioned discrete item relating to the partial release of the valuation allowance in the amount of $314 million and state income tax refunds resulting from the filing of amended state income tax returns reporting federal audit adjustments. Our ability to utilize NOL carryforwards and possibly other tax attributes to reduce future federal taxable income and federal income tax is subject to various limitations under Section 382 of the Code. The utilization of these attributes may be subject to an annual limitation under Section 382 of the Code should transactions involving our equity, including issuances of our stock or the sale or exchange of our stock by certain shareholders, result in a cumulative shift of more than 50% in the beneficial ownership of our stock during any three-year testing period (an “Ownership Change”). (For this purpose, “stock” includes certain preferred stock). Some states impose similar limitations on tax attribute utilization upon experiencing an Ownership Change. As of September 30, 2019, we do not believe that an Ownership Change has occurred that would subject us to an annual limitation on the utilization of our NOL carryforwards, disallowed interest carryforwards and other tax attributes. However, the exchanges of our common stock for certain outstanding senior notes that occurred during the Current Quarter (see Note 6 for further details of the debt exchanges) and the exchange of our common stock for certain Cumulative Convertible Preferred Stock which also occurred during the Current Quarter (see Note 12 for further details of the stock exchange) increased our cumulative shift to over 40% . As a result, future transactions involving our equity, including relatively small transactions and transactions beyond our control, could cause an Ownership Change and therefore an annual limitation on the utilization of NOL carryforwards, disallowed interest carryforwards and possibly other tax attributes. Further, proposed regulations issued on September 10, 2019, under Section 382(h) of the Code (the “Proposed Regulations”) would, if finalized in their current form, significantly reduce our annual limitation should we experience an Ownership Change on or after the date the Proposed Regulations become final. Among other changes, the Proposed Regulations would, if finalized in their current form, limit the potential increases to the annual limitation amount associated with certain built-in gains existing at the time of an Ownership Change, thereby significantly reducing the ability to utilize tax attributes. As a result, certain NOL carryforwards, disallowed interest carryforwards and other tax attributes may need to be written off or have a valuation allowance maintained against them possibly leading to a material charge to income tax expense. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Equity | Equity Common Stock A summary of the changes in our common shares issued is detailed below. Three Months Ended September 30, Nine Months Ended, September 30, 2019 2018 2019 2018 (in thousands) Beginning balance 1,634,486 913,271 913,716 908,733 Common shares issued for WildHorse Merger (a) — — 717,376 — Exchange of convertible notes (b) 73,389 — 73,389 — Exchange of senior notes (b) 235,564 — 235,564 — Exchange of preferred stock (c) 10,368 — 10,368 — Restricted stock issuances (net of forfeitures and cancellations) (d) 344 421 3,738 4,959 Ending balance 1,954,151 913,692 1,954,151 913,692 ____________________________________________ (a) See Note 3 for discussion of WildHorse Merger. (b) See Note 6 for discussion of debt exchanges. (c) In the Current Quarter, we exchanged 10,367,950 shares of common stock for 40,000 shares of our 5.75% (Series A) Cumulative Convertible Preferred Stock. In connection with the exchange, we recognized a loss equal to the excess of the fair value of all common stock issued in exchange for the preferred stock over the fair value of the common stock issuable pursuant to the original terms of the preferred stock. The loss of $17 million is reflected as a reduction to net income available to common stockholders for the purpose of calculating earnings per common share. (d) See Note 13 for discussion of restricted stock. Preferred Stock A summary of the changes in our outstanding shares of preferred stock is detailed below. 5.75% 5.75% (A) 4.50% 5.00% (2005B) (in thousands) Shares outstanding as of July 1, 2019 770 463 2,559 1,811 Exchange of preferred stock (a) — (40 ) — — Shares outstanding as of September 30, 2019 770 423 2,559 1,811 Shares outstanding as of July 1, 2018 770 463 2,559 1,811 Shares outstanding as of January 1, 2019 770 463 2,559 1,811 Exchange of preferred stock (a) — (40 ) — — Shares outstanding as of September 30, 2019 770 423 2,559 1,811 Shares outstanding as of January 1, 2018 770 463 2,559 1,811 Liquidation price per share $ 1,000 $ 1,000 $ 100 $ 100 ____________________________________________ (a) See discussion above regarding the exchange of our 5.75% (Series A) Cumulative Convertible Preferred Stock in the Current Quarter. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Our share-based compensation program consists of restricted stock, stock options, performance share units (PSUs) and cash restricted stock units (CRSUs) granted to employees and restricted stock granted to non-employee directors under our long-term incentive plans. The restricted stock and stock options are equity-classified awards and the PSUs and CRSUs are liability-classified awards. Equity-Classified Awards Restricted Stock. We grant restricted stock units to employees and non-employee directors. A summary of the changes in unvested restricted stock during the Current Period is presented below: Shares of Unvested Restricted Stock Weighted Average Grant Date Fair Value Per Share (in thousands) Unvested restricted stock as of January 1, 2019 11,858 $ 4.43 Granted 5,370 $ 2.85 Vested (5,439 ) $ 4.46 Forfeited (1,241 ) $ 3.75 Unvested restricted stock as of September 30, 2019 10,548 $ 3.69 The aggregate intrinsic value of restricted stock that vested during the Current Period was approximately $15 million based on the stock price at the time of vesting. As of September 30, 2019 , there was approximately $24 million of total unrecognized compensation expense related to unvested restricted stock. The expense is expected to be recognized over a weighted average period of approximately 1.92 years. Stock Options. In the Current Period and the Prior Period, we granted members of management stock options that vest ratably over a three -year period. Each stock option award has an exercise price equal to the closing price of our common stock on the grant date. Outstanding options expire seven years to ten years from the date of grant. We utilize the Black-Scholes option pricing model to measure the fair value of stock options. The expected life of an option is determined using the simplified method. Volatility assumptions are estimated based on the average historical volatility of Chesapeake stock over the expected life of an option. The risk-free interest rate is based on the U.S. Treasury rate in effect at the time of the grant over the expected life of the option. The dividend yield is based on an annual dividend yield, taking into account our dividend policy, over the expected life of the option. We used the following weighted average assumptions to estimate the grant date fair value of the stock options granted in the Current Period: Expected option life – years 6.0 Volatility 65.61 % Risk-free interest rate 2.47 % Dividend yield — % The following table provides information related to stock option activity in the Current Period: Number of Shares Underlying Options Weighted Average Exercise Price Per Share Weighted Average Contract Life in Years Aggregate Intrinsic Value (a) (in thousands) ($ in millions) Outstanding as of January 1, 2019 18,096 $ 7.20 7.15 $ — Granted 1,000 $ 2.97 Exercised — $ — $ — Expired (487 ) $ 6.49 Forfeited (589 ) $ 3.92 Outstanding as of September 30, 2019 18,020 $ 7.09 6.12 $ — Exercisable as of September 30, 2019 12,999 $ 8.30 5.31 $ — ___________________________________________ (a) The intrinsic value of a stock option is the amount by which the current market value or the market value upon exercise of the underlying stock exceeds the exercise price of the option. As of September 30, 2019 , there was $7 million of total unrecognized compensation expense related to stock options. The expense is expected to be recognized over a weighted average period of approximately 1.26 years , net of actual forfeitures. Restricted Stock and Stock Option Compensation. We recognized the following compensation costs related to restricted stock and stock options for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period: Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) General and administrative expenses $ 6 $ 7 $ 21 $ 24 Oil and natural gas properties 1 — 2 2 Oil, natural gas and NGL production expenses 1 1 3 4 Exploration expenses — — — — Total restricted stock and stock option compensation $ 8 $ 8 $ 26 $ 30 Liability-Classified Awards Performance Share Units. In the Current Period and the Prior Period, we granted PSUs to senior management that vest ratably over a three -year performance period and are settled in cash. The ultimate amount earned is based on achievement of performance metrics established by the Compensation Committee of the Board of Directors. Compensation expense associated with PSU awards is recognized over the service period based on the graded-vesting method. The value of the PSU awards at the end of each reporting period is dependent upon our estimates of the underlying performance measures. For PSUs granted in 2017, performance metrics include a total shareholder return (TSR) component, which can range from 0% to 100% and an operational performance component based on finding and development costs, which can range from 0% to 100% , resulting in a maximum payout of 200% . The payout percentage for the 2017 PSU awards is capped at 100% if our absolute TSR is less than zero . The PSUs are settled in cash on the third anniversary of the awards. We utilized a Monte Carlo simulation for the TSR performance measure and the following assumptions to determine the grant date fair value and the reporting date fair value of the 2017 awards. Grant Date Assumptions Assumption 2017 Awards Volatility 80.65 % Risk-free interest rate 1.54 % Dividend yield for value of awards — % Reporting Period Assumptions Assumption 2017 Awards Volatility 95.41 % Risk-free interest rate 1.87 % Dividend yield for value of awards — % As the above assumptions and expected satisfaction of performance metrics change, the PSU liabilities will be adjusted quarterly through the end of the performance period. For PSUs granted in 2018 and 2019, performance metrics include an operational performance component based on a ratio of cumulative earnings before interest expense, income taxes, and depreciation, depletion and amortization expense (EBITDA) to capital expenditures, for which payout can range from 0% to 200% . For the 2019 award, EBITDA and capital expenditures will be adjusted for changes resulting from our conversion from the full cost method of accounting to the successful efforts method. The vested PSUs are settled in cash on each of the three annual vesting dates. We used the closing price of our common stock on the grant date to determine the grant date fair value of the PSUs. The PSU liability will be adjusted quarterly, based on changes in our stock price and expected satisfaction of performance metrics, through the end of the performance period. Cash Restricted Stock Units . In 2018, we granted CRSUs to employees that vest straight-line over a three -year period and are settled in cash on each of the three annual vesting dates. The ultimate amount earned is based on the closing price of our common stock on each of the vesting dates. We used the closing price of our common stock on the grant date to determine the grant date fair value of the CRSUs. The CRSU liability will be adjusted quarterly, based on changes in our stock price, through the end of the vesting period. The following table presents a summary of our liability-classified awards: Grant Date Fair Value September 30, 2019 Units Fair Value Vested Liability ($ in millions) ($ in millions) 2019 PSU Awards: Payable 2020, 2021 and 2022 4,785,372 $ 14 $ 7 $ — 2018 PSU Awards: Payable 2020 and 2021 2,388,185 $ 7 $ 3 $ — 2017 PSU Awards: Payable 2020 1,174,973 $ 8 $ 1 $ 1 2018 CRSU Awards: Payable 2020 and 2021 9,267,227 $ 28 $ 13 $ — We recognized the following compensation costs, net of actual forfeitures, related to our liability-classified awards for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period. Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) General and administrative expenses $ (1 ) $ (1 ) $ 7 $ 20 Oil and natural gas properties 1 1 2 2 Oil, natural gas and NGL production expenses — 1 3 3 Exploration expenses — — — 1 Total liability-classified awards compensation $ — $ 1 $ 12 $ 26 |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Activities | Derivative and Hedging Activities We use derivative instruments to reduce our exposure to fluctuations in future commodity prices and to protect our expected operating cash flow against significant market movements or volatility. All of our oil, natural gas and NGL derivative instruments are net settled based on the difference between the fixed-price payment and the floating-price payment, resulting in a net amount due to or from the counterparty. None of our open oil, natural gas or NGL derivative instruments were designated for hedge accounting as of September 30, 2019 or December 31, 2018. Oil, Natural Gas and NGL Derivatives As of September 30, 2019 and December 31, 2018, our oil, natural gas and NGL derivative instruments consisted of the following types of instruments: • Swaps : We receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. In exchange for higher fixed prices on certain of our swap trades, we may sell call options and call swaptions. • Options : We occasionally sell and buy call and put options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, we pay the counterparty the excess on sold call options and we receive the excess on bought call options. At the time of settlement, if the market price is lower than the fixed price of the put option, we receive the difference on bought put options and pay the counterparty the difference on sold put options. If the market price settles below the fixed price of the call option or above the fixed price of the put option, no payment is due from either party. • Call Swaptions : We sell call swaptions to counterparties in exchange for a premium that allow the counterparty, on a specific date, to extend an existing fixed-price swap for a certain period of time or to increase the notional volumes of an existing fixed-price swap. • Collars : These instruments contain a fixed floor price (put) and ceiling price (call). If the market price exceeds the call strike price or falls below the put strike price, we receive the fixed price and pay the market price. If the market price is between the put and the call strike prices, no payments are due from either party. Three-way collars include the sale by us of an additional put option in exchange for a more favorable strike price on the call option. This eliminates the counterparty’s downside exposure below the second put option strike price. • Basis Protection Swaps : These instruments are arrangements that guarantee a fixed price differential to NYMEX from a specified delivery point. We receive the fixed price differential and pay the floating market price differential to the counterparty for the hedged commodity. The estimated fair values of our oil, natural gas and NGL derivative instrument assets (liabilities) as of September 30, 2019 and December 31, 2018 are provided below: September 30, 2019 December 31, 2018 Notional Volume Fair Value Notional Volume Fair Value ($ in millions) ($ in millions) Oil (mmbbl): Fixed-price swaps 22 $ 152 12 $ 157 Collars 3 33 8 98 Call swaptions 2 (1 ) — — Put options 1 (2 ) — — Basis protection swaps 2 4 7 5 Total oil 30 186 27 260 Natural gas (bcf): Fixed-price swaps 383 139 623 26 Three-way collars 15 3 88 1 Collars 9 3 55 (3 ) Call options 28 — 44 — Call swaptions 136 (7 ) 106 (9 ) Basis protection swaps 54 (1 ) 50 — Total natural gas 625 137 966 15 Contingent consideration: Utica divestiture — 7 Total estimated fair value $ 323 $ 282 We have terminated certain commodity derivative contracts that were previously designated as cash flow hedges for which the original contract months are yet to occur. See further discussion below under Effect of Derivative Instruments – Accumulated Other Comprehensive Income (Loss) . Contingent Consideration Arrangements In 2018, we sold our Utica Shale position to EAP Ohio, LLC (“Encino”). The purchase and sale agreement with Encino provides for additional contingent payments to us of up to $100 million comprised of $50 million in consideration in each case if, on or prior to December 31, 2019, there is a period of twenty ( 20 ) trading days out of a period of thirty ( 30 ) consecutive trading days where (i) the average of the NYMEX natural gas strip prices for the months comprising the year 2022 equals or exceeds $3.00 /mmbtu as calculated pursuant to the purchase agreement, and (ii) the average of the NYMEX natural gas strip price for the months comprising the year 2023 equals or exceeds $3.25 /mmbtu as calculated pursuant to the purchase and sale agreement. In the Current Period, based on the unlikelihood of any payout occurring related to the contingent consideration, we determined the contingent consideration had no fair value and recognized a $7 million unrealized loss, which is included as a reduction in our gains on sales of assets in the condensed consolidated statement of operations. Effect of Derivative Instruments – Condensed Consolidated Balance Sheets The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 on a gross basis and after same-counterparty netting: Balance Sheet Classification Gross Fair Value Amounts Netted in the Consolidated Balance Sheets Net Fair Value Presented in the Consolidated Balance Sheet ($ in millions) As of September 30, 2019 Commodity Contracts: Short-term derivative asset $ 294 $ (22 ) $ 272 Long-term derivative asset 55 (4 ) 51 Short-term derivative liability (22 ) 22 — Long-term derivative liability (4 ) 4 — Contingent Consideration: Short-term derivative asset — — — Total derivatives $ 323 $ — $ 323 As of December 31, 2018 Commodity Contracts: Short-term derivative asset $ 306 $ (104 ) $ 202 Long-term derivative asset 117 (41 ) 76 Short-term derivative liability (107 ) 104 (3 ) Long-term derivative liability (41 ) 41 — Contingent Consideration: Short-term derivative asset 7 — 7 Total derivatives $ 282 $ — $ 282 Effect of Derivative Instruments – Condensed Consolidated Statements of Operations The components of oil, natural gas and NGL revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below: Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) Oil, natural gas and NGL revenues $ 1,003 $ 1,331 $ 3,412 $ 3,924 Gains (losses) on undesignated oil, natural gas and NGL derivatives 175 (124 ) 167 (475 ) Losses on terminated cash flow hedges (8 ) (8 ) (26 ) (25 ) Total oil, natural gas and NGL revenues $ 1,170 $ 1,199 $ 3,553 $ 3,424 The components of marketing revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below: Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) Marketing revenues $ 889 $ 1,219 $ 3,042 $ 3,738 Losses on undesignated marketing natural gas derivatives — — (4 ) — Total marketing revenues $ 889 $ 1,219 $ 3,038 $ 3,738 Effect of Derivative Instruments – Accumulated Other Comprehensive Income (Loss) A reconciliation of the changes in accumulated other comprehensive income (loss) in our condensed consolidated statements of stockholders’ equity related to our cash flow hedges is presented below: Three Months Ended September 30, 2019 2018 Before After Before After ($ in millions) Balance, beginning of period $ (62 ) $ (5 ) $ (97 ) (40 ) Losses reclassified to income 8 8 8 8 Balance, end of period $ (54 ) $ 3 $ (89 ) $ (32 ) Nine Months Ended September 30, 2019 2018 Before After Before After ($ in millions) Balance, beginning of period $ (80 ) $ (23 ) $ (114 ) (57 ) Losses reclassified to income 26 26 25 25 Balance, end of period $ (54 ) $ 3 $ (89 ) $ (32 ) The accumulated other comprehensive loss as of September 30, 2019 represents the net deferred loss associated with commodity derivative contracts that were previously designated as cash flow hedges for which the original contract months are yet to occur. Remaining deferred gain or loss amounts will be recognized in earnings in the month for which the original contract months are to occur. As of September 30, 2019 , we expect to transfer approximately $34 million of net loss included in accumulated other comprehensive income (loss) to net income (loss) during the next 12 months. The remaining amounts will be transferred by December 31, 2022. Credit Risk Considerations Our derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk, we enter into derivative contracts only with counterparties that have a high credit rating or are deemed by us to have acceptable credit strength, and are deemed by management to be competent and competitive market-makers, and we attempt to limit our exposure to non-performance by any single counterparty. As of September 30, 2019 , our oil, natural gas and NGL derivative instruments were spread among 15 counterparties. Hedging Arrangements Certain of our hedging arrangements are with counterparties that are also lenders (or affiliates of lenders) under the Chesapeake revolving credit facility and/or the BVL revolving credit facility. The contracts entered into with these counterparties are secured by the same collateral that secures the revolving credit facilities. In addition, we enter into bilateral hedging agreements with other counterparties. The counterparties’ and our obligations under the bilateral hedging agreements must be secured by cash or letters of credit to the extent that any mark-to-market amounts owed to us or by us exceed defined thresholds. As of September 30, 2019 , there were no letters of credit or cash posted as collateral for our commodity derivatives. Fair Value The fair value of our derivatives is based on third-party pricing models which utilize inputs that are either readily available in the public market, such as oil, natural gas and NGL forward curves and discount rates, or can be corroborated from active markets or broker quotes. These values are compared to the values given by our counterparties for reasonableness. Since oil, natural gas and NGL swaps do not include optionality and therefore generally have no unobservable inputs, they are classified as Level 2. All other derivatives have some level of unobservable input, such as volatility curves, and are therefore classified as Level 3. Derivatives are also subject to the risk that either party to a contract will be unable to meet its obligations. We factor non-performance risk into the valuation of our derivatives using current published credit default swap rates. To date, this has not had a material impact on the values of our derivatives. The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ($ in millions) As of September 30, 2019 Derivative Assets (Liabilities): Commodity assets $ — $ 307 $ 40 $ 347 Commodity liabilities — (16 ) (8 ) (24 ) Utica divestiture contingent consideration — — — — Total derivatives $ — $ 291 $ 32 $ 323 As of December 31, 2018 Derivative Assets (Liabilities): Commodity assets $ — $ 319 $ 103 $ 422 Commodity liabilities — (131 ) (16 ) (147 ) Utica divestiture contingent consideration — — 7 7 Total derivatives $ — $ 188 $ 94 $ 282 A summary of the changes in the fair values of our financial assets (liabilities) classified as Level 3 during the Current Period and the Prior Period is presented below: Commodity Derivatives Utica Contingent Consideration ($ in millions) Balance, as of January 1, 2019 $ 87 $ 7 Total gains (losses) (realized/unrealized): Included in earnings (a) (47 ) (7 ) Total purchases, issuances, sales and settlements: Settlements (8 ) — Balance, as of September 30, 2019 $ 32 $ — Balance, as of January 1, 2018 $ (15 ) $ — Total gains (losses) (realized/unrealized): Included in earnings (a) (3 ) — Total purchases, issuances, sales and settlements: Settlements 13 — Balance, as of September 30, 2018 $ (5 ) $ — ___________________________________________ (a) Commodity Derivatives Utica Contingent Consideration 2019 2018 2019 2018 ($ in millions) Total gains (losses) included in earnings for the period $ (47 ) $ (3 ) $ (7 ) $ — Change in unrealized gains (losses) related to assets still held at reporting date $ (57 ) $ (3 ) $ (7 ) $ — Qualitative and Quantitative Disclosures about Unobservable Inputs for Level 3 Fair Value Measurements The significant unobservable inputs for Level 3 derivative contracts include market volatility. Changes in market volatility impact the fair value measurement of our derivative contracts, which is based on an estimate derived from option models. For example, an increase or decrease in the forward prices and volatility of oil and natural gas prices decreases or increases the fair value of oil and natural gas derivatives. The following table presents quantitative information about Level 3 inputs used in the fair value measurement of our commodity derivative contracts at fair value as of September 30, 2019 : Instrument Type Unobservable Input Range Weighted Average Fair Value ($ in millions) Oil trades Oil price volatility curves 24.62% – 48.77% 32.55% $ 33 Natural gas trades Natural gas price volatility curves 13.37% – 145.37% 37.40% $ (1 ) |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments In the Current Period in connection with the acquisition of WildHorse, we obtained a 50% membership interest in JWH Midstream LLC (JWH). The carrying value of our investment in JWH, which was being accounted for as an equity method investment, was approximately $17 million as of March 31, 2019. In the Current Period, we paid approximately $7 million to terminate our involvement in the partnership. This removed us from any future obligations related to this joint venture and, therefore, we impaired the full value of the investment and recognized approximately $24 million of impairment expense in the Current Period. In the Prior Period, FTS International, Inc. (NYSE: FTSI) completed an initial public offering. Due to the offering, the ownership percentage of our equity method investment in FTSI decreased from approximately 29% to 24% and resulted in a gain of approximately $78 million . In addition, we sold approximately 4.3 million shares of FTSI in the offering for net proceeds of approximately $74 million and recognized a gain of approximately $61 million decreasing our ownership percentage to approximately 20% . We continue to hold approximately 22.0 million shares in the publicly traded company. In the Current Period, the hydraulic fracturing industry experienced challenging operating conditions resulting in the current fair value of our investment in FTSI to fall below book value of $65 million at the end of the Current Quarter. Given that the average NYSE closing price for FTSI shares in the Current Quarter exceeded our carrying value per share and more often than not the closing price was greater than our carrying value per share, we have not assessed the reduction in fair value of our investment in FTSI to be other-than-temporary. We will continue to monitor the hydraulic fracturing industry, FTSI operating results and FTSI share price for indications that the reduction in fair value is other-than-temporary, which could result in an impairment of our investment in FTSI. |
Other Operating Expenses
Other Operating Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses | Other Operating Expenses In the Current Period, we recorded approximately $34 million of costs related to our acquisition of WildHorse which consisted of consulting fees, financial advisory fees, legal fees and travel and lodging expenses. In addition, we recorded approximately $38 million of severance expense as a result of the acquisition of WildHorse. A majority of the WildHorse executives and employees were terminated. These executives and employees were entitled to severance benefits in accordance with existing employment agreements. |
Restructuring and Other Termina
Restructuring and Other Termination Costs | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Termination Costs | Restructuring and Other Termination Costs On January 30, 2018, we underwent a reduction in workforce impacting approximately 13% of employees across all functions, primarily on our Oklahoma City campus. In connection with the reduction, we incurred a total charge in the Prior Period of approximately $38 million for one-time termination benefits. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements Other Current Assets. Assets related to our deferred compensation plan are included in other current assets. The fair value of these assets is determined using quoted market prices, as they consist of exchange-traded securities. Other Current Liabilities . Liabilities related to our deferred compensation plan are included in other current liabilities. The fair values of these liabilities are determined using quoted market prices, as the plan consists of exchange-traded mutual funds. Financial Assets (Liabilities) . The following table provides fair value measurement information for the above-noted financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ($ in millions) As of September 30, 2019 Financial Assets (Liabilities): Other current assets $ 46 $ — $ — $ 46 Other current liabilities (45 ) — — (45 ) Total $ 1 $ — $ — $ 1 As of December 31, 2018 Financial Assets (Liabilities): Other current assets $ 50 $ — $ — $ 50 Other current liabilities (51 ) — — (51 ) Total $ (1 ) $ — $ — $ (1 ) See Note 6 for information regarding fair value measurement of our debt instruments. See Note 14 for information regarding fair value measurement of our derivatives. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information Chesapeake Energy Corporation is a holding company, owns no operating assets and has no significant operations independent of its subsidiaries. Our obligations under our outstanding senior notes, convertible senior notes and Chesapeake revolving credit facility listed in Note 6 are fully and unconditionally guaranteed, jointly and severally, by certain of our 100% owned subsidiaries. Our BVL subsidiaries are not guarantors of Chesapeake’s indebtedness and are subject to covenants under the BVL credit agreement and BVL indenture. Subsidiaries with noncontrolling interests, consolidated variable interest entities and certain de minimis subsidiaries are also non-guarantors. The tables below are condensed consolidating financial statements for Chesapeake Energy Corporation (parent) on a stand-alone, unconsolidated basis, and its combined guarantor and combined non-guarantor subsidiaries as of September 30, 2019 and December 31, 2018 and for the three and six months ended September 30, 2019 and 2018. This financial information may not necessarily be indicative of our results of operations, cash flows or financial position had these subsidiaries operated as independent entities. CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated CURRENT ASSETS: Cash and cash equivalents $ 8 $ 1 $ 10 $ (5 ) $ 14 Other current assets 56 1,231 102 — 1,389 Intercompany receivable, net 6,275 — — (6,275 ) — Total Current Assets 6,339 1,232 112 (6,280 ) 1,403 PROPERTY AND EQUIPMENT: Oil and natural gas properties, at cost based on successful efforts accounting, net — 9,513 4,221 — 13,734 Other property and equipment, net — 1,046 86 — 1,132 Property and equipment held for sale, net — 10 — — 10 Total Property and Equipment, Net — 10,569 4,307 — 14,876 LONG-TERM ASSETS: Other long-term assets 336 231 30 (297 ) 300 Investments in subsidiaries and intercompany advances 6,013 2,338 — (8,351 ) — TOTAL ASSETS $ 12,688 $ 14,370 $ 4,449 $ (14,928 ) $ 16,579 CURRENT LIABILITIES: Current liabilities $ 325 $ 1,805 $ 223 $ (5 ) $ 2,348 Intercompany payable, net — 6,275 — (6,275 ) — Total Current Liabilities 325 8,080 223 (6,280 ) 2,348 LONG-TERM LIABILITIES: Long-term debt, net 7,612 — 1,521 — 9,133 Deferred income tax liabilities — — 297 (297 ) — Other long-term liabilities 55 277 31 — 363 Total Long-Term Liabilities 7,667 277 1,849 (297 ) 9,496 EQUITY: Chesapeake stockholders’ equity 4,696 6,013 2,338 (8,351 ) 4,696 Noncontrolling interests — — 39 — 39 Total Equity 4,696 6,013 2,377 (8,351 ) 4,735 TOTAL LIABILITIES AND EQUITY $ 12,688 $ 14,370 $ 4,449 $ (14,928 ) $ 16,579 CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2018 ($ in millions) Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated CURRENT ASSETS: Cash and cash equivalents $ 4 $ 1 $ 1 $ (2 ) $ 4 Other current assets 60 1,532 2 — 1,594 Intercompany receivable, net 6,671 — — (6,671 ) — Total Current Assets 6,735 1,533 3 (6,673 ) 1,598 PROPERTY AND EQUIPMENT: Oil and natural gas properties, at cost based on successful efforts accounting, net — 9,664 48 — 9,712 Other property and equipment, net — 1,091 — — 1,091 Property and equipment held for sale, net — 15 — — 15 Total Property and Equipment, Net — 10,770 48 — 10,818 LONG-TERM ASSETS: Other long-term assets 26 293 — — 319 Investments in subsidiaries and intercompany advances 3,248 9 — (3,257 ) — TOTAL ASSETS $ 10,009 $ 12,605 $ 51 $ (9,930 ) $ 12,735 CURRENT LIABILITIES: Current liabilities $ 523 $ 2,365 $ 1 $ (2 ) $ 2,887 Intercompany payable, net — 6,671 — (6,671 ) — Total Current Liabilities 523 9,036 1 (6,673 ) 2,887 LONG-TERM LIABILITIES: Long-term debt, net 7,341 — — — 7,341 Other long-term liabilities 53 321 — — 374 Total Long-Term Liabilities 7,394 321 — — 7,715 EQUITY: Chesapeake stockholders’ equity 2,092 3,248 9 (3,257 ) 2,092 Noncontrolling interests — — 41 — 41 Total Equity 2,092 3,248 50 (3,257 ) 2,133 TOTAL LIABILITIES AND EQUITY $ 10,009 $ 12,605 $ 51 $ (9,930 ) $ 12,735 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 932 $ 238 $ — $ 1,170 Marketing — 889 — — 889 Total Revenues — 1,821 238 — 2,059 Other — 15 — — 15 Gains on sales of assets — 13 — — 13 Total Revenues and Other — 1,849 238 — 2,087 OPERATING EXPENSES: Oil, natural gas and NGL production — 129 26 — 155 Oil, natural gas and NGL gathering, processing and transportation — 268 2 — 270 Production taxes — 25 10 — 35 Exploration — 17 — — 17 Marketing — 901 — — 901 General and administrative — 43 23 — 66 Depreciation, depletion and amortization — 421 152 — 573 Impairments — 9 — — 9 Other operating expense — 15 — — 15 Total Operating Expenses — 1,828 213 — 2,041 INCOME FROM OPERATIONS — 21 25 — 46 OTHER INCOME (EXPENSE): Interest income (expense) (161 ) 3 (19 ) — (177 ) Losses on investments — (4 ) — — (4 ) Gains on purchases or exchanges of debt 64 — 6 — 70 Other income — 3 — — 3 Equity in net earnings of subsidiary 25 2 — (27 ) — Total Other Income (Expense) (72 ) 4 (13 ) (27 ) (108 ) INCOME (LOSS) BEFORE INCOME TAXES (72 ) 25 12 (27 ) (62 ) INCOME TAX (BENEFIT) EXPENSE (11 ) — 10 — (1 ) NET INCOME (LOSS) (61 ) 25 2 (27 ) (61 ) Net loss attributable to noncontrolling interests — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE (61 ) 25 2 (27 ) (61 ) Other comprehensive income — 8 — — 8 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ (61 ) $ 33 $ 2 $ (27 ) $ (53 ) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2018 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 1,194 $ 5 $ — $ 1,199 Marketing — 1,219 — — 1,219 Total Revenues — 2,413 5 — 2,418 Other — 16 — — 16 Losses on sales of assets — (10 ) — — (10 ) Total Revenues and Other — 2,419 5 — 2,424 OPERATING EXPENSES: Oil, natural gas and NGL production — 132 — — 132 Oil, natural gas and NGL gathering, processing and transportation — 362 2 — 364 Production taxes — 33 1 — 34 Exploration — 22 — — 22 Marketing — 1,238 — — 1,238 General and administrative — 81 — — 81 Provision for legal contingencies, net — 8 — — 8 Depreciation, depletion and amortization — 403 2 — 405 Impairments — 58 — — 58 Total Operating Expenses — 2,337 5 — 2,342 INCOME FROM OPERATIONS — 82 — — 82 OTHER INCOME (EXPENSE): Interest expense (163 ) (2 ) — — (165 ) Losses on purchases or exchanges of debt (68 ) — — — (68 ) Other income — 6 — — 6 Equity in net earnings of subsidiary 86 — — (86 ) — Total Other Income (Expense) (145 ) 4 — (86 ) (227 ) INCOME (LOSS) BEFORE INCOME TAXES (145 ) 86 — (86 ) (145 ) INCOME TAX EXPENSE 1 — — — 1 NET INCOME (LOSS) (146 ) 86 — (86 ) (146 ) Net (income) loss attributable to noncontrolling interests — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE (146 ) 86 — (86 ) (146 ) Other comprehensive income — 8 — — 8 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ (146 ) $ 94 $ — $ (86 ) $ (138 ) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 3,000 $ 553 $ — $ 3,553 Marketing — 3,038 — — 3,038 Total Revenues — 6,038 553 — 6,591 Other — 45 — — 45 Gains on sales of assets — 33 — — 33 Total Revenues and Other — 6,116 553 — 6,669 OPERATING EXPENSES: Oil, natural gas and NGL production — 384 69 — 453 Oil, natural gas and NGL gathering, processing and transportation — 802 13 — 815 Production taxes — 83 26 — 109 Exploration — 53 3 — 56 Marketing — 3,071 — — 3,071 General and administrative — 193 65 — 258 Provision for legal contingencies, net — 3 — — 3 Depreciation, depletion and amortization — 1,295 377 — 1,672 Impairments — 11 — — 11 Other operating expense — 41 38 — 79 Total Operating Expenses — 5,936 591 — 6,527 INCOME (LOSS) FROM OPERATIONS — 180 (38 ) — 142 OTHER INCOME (EXPENSE): Interest income (expense) (475 ) 13 (51 ) — (513 ) Losses on investments — (4 ) (24 ) — (28 ) Gains on purchases or exchanges of debt 64 — 6 — 70 Other income — 28 2 — 30 Equity in net earnings of subsidiary 129 (88 ) — (41 ) — Total Other Expense (282 ) (51 ) (67 ) (41 ) (441 ) INCOME (LOSS) BEFORE INCOME TAXES (282 ) 129 (105 ) (41 ) (299 ) INCOME TAX BENEFIT (298 ) — (17 ) — (315 ) NET INCOME (LOSS) 16 129 (88 ) (41 ) 16 Net loss attributable to noncontrolling interests — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 16 129 (88 ) (41 ) 16 Other comprehensive income — 26 — — 26 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 16 $ 155 $ (88 ) $ (41 ) $ 42 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2018 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 3,410 $ 14 $ — $ 3,424 Marketing — 3,738 — — 3,738 Total Revenues — 7,148 14 — 7,162 Other — 48 — — 48 Gains on sales of assets — 27 — — 27 Total Revenues and Other — 7,223 14 — 7,237 OPERATING EXPENSES: Oil, natural gas and NGL production — 417 — — 417 Oil, natural gas and NGL gathering, processing and transportation — 1,055 5 — 1,060 Production taxes — 90 1 — 91 Exploration — 123 — — 123 Marketing — 3,798 — — 3,798 General and administrative — 272 1 — 273 Restructuring and other termination costs — 38 — — 38 Provision for legal contingencies, net — 17 — — 17 Depreciation, depletion and amortization — 1,330 5 — 1,335 Impairments — 122 — — 122 Other operating income — (1 ) — — (1 ) Total Operating Expenses — 7,261 12 — 7,273 INCOME (LOSS) FROM OPERATIONS — (38 ) 2 — (36 ) OTHER INCOME (EXPENSE): Interest expense (480 ) (2 ) — — (482 ) Gains on investments — 139 — — 139 Losses on purchases or exchanges of debt (68 ) — — — (68 ) Other income — 62 — — 62 Equity in net earnings of subsidiary 162 1 (1 ) (162 ) — Total Other Income (Expense) (386 ) 200 (1 ) (162 ) (349 ) INCOME (LOSS) BEFORE INCOME TAXES (386 ) 162 1 (162 ) (385 ) INCOME TAX BENEFIT (8 ) — — — (8 ) NET INCOME (LOSS) (378 ) 162 1 (162 ) (377 ) Net income attributable to noncontrolling interests — (1 ) — — (1 ) NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE (378 ) 161 1 (162 ) (378 ) Other comprehensive income — 25 — — 25 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ (378 ) $ 186 $ 1 $ (162 ) $ (353 ) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash Provided By Operating Activities $ — $ 898 $ 287 $ (3 ) $ 1,182 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs — (1,204 ) (436 ) — (1,640 ) Business combination, net — (381 ) 28 — (353 ) Acquisitions of proved and unproved properties — (31 ) — — (31 ) Proceeds from divestitures of proved and unproved properties — 110 — — 110 Additions to other property and equipment — (12 ) (15 ) — (27 ) Other investing activities — 6 — — 6 Net Cash Used In Investing Activities — (1,512 ) (423 ) — (1,935 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 8,096 — 709 — 8,805 Payments on revolving credit facility borrowings (7,011 ) — (484 ) — (7,495 ) Cash paid to purchase debt (381 ) — (76 ) — (457 ) Cash paid for preferred stock dividends (69 ) — — — (69 ) Other financing activities (13 ) (6 ) (5 ) 3 (21 ) Intercompany advances, net (620 ) 620 1 (1 ) — Net Cash Provided By Financing Activities 2 614 145 2 763 Net increase in cash and cash equivalents 2 — 9 (1 ) 10 Cash and cash equivalents, beginning of period 4 1 1 (2 ) 4 Cash and cash equivalents, end of period $ 6 $ 1 $ 10 $ (3 ) $ 14 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2018 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash Provided By Operating Activities $ 86 $ 1,312 $ 7 $ (10 ) $ 1,395 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs — (1,407 ) — — (1,407 ) Acquisitions of proved and unproved properties — (118 ) — — (118 ) Proceeds from divestitures of proved and unproved properties — 395 — — 395 Additions to other property and equipment — (11 ) — — (11 ) Other investing activities — 149 — — 149 Net Cash Used In Investing Activities — (992 ) — — (992 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 9,095 — — — 9,095 Payments on revolving credit facility borrowings (9,231 ) — — — (9,231 ) Proceeds from issuance of senior notes, net 1,237 — — — 1,237 Cash paid to purchase debt (1,285 ) — — — (1,285 ) Cash paid for preferred stock dividends (69 ) — — — (69 ) Other financing activities (2 ) (127 ) (9 ) (13 ) (151 ) Intercompany advances, net 170 (193 ) 1 22 — Net Cash Used In Financing Activities (85 ) (320 ) (8 ) 9 (404 ) Net increase (decrease) in cash and cash equivalents 1 — (1 ) (1 ) (1 ) Cash and cash equivalents, beginning of period 5 1 2 (3 ) 5 Cash and cash equivalents, end of period $ 6 $ 1 $ 1 $ (4 ) $ 4 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Chesapeake were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures have been condensed or omitted. |
Recast Financial Information for Change in Accounting Principle | Recast Financial Information for Change in Accounting Principle In the first quarter of 2019, we voluntarily changed our method of accounting for oil and natural gas exploration and development activities from the full cost method to the successful efforts method. Accordingly, financial information for prior periods has been recast to reflect retrospective application of the successful efforts method. Although the full cost method of accounting for oil and natural gas exploration and development activities continues to be an accepted alternative, the successful efforts method of accounting is the generally preferred method of the SEC and, because it is more widely used in the industry, we expect the change to improve the comparability of our financial statements to our peers. We also believe the successful efforts method provides a more representational depiction of assets and operating results and provides for our investments in oil and natural gas properties to be assessed for impairment in accordance with Accounting Standards Codification (ASC) Topic 360, Property Plant and Equipment, rather than valuations based on prices and costs prescribed under the full cost method as of the balance sheet date. For detailed information regarding the effects of the change to the successful efforts method, see Note 2 . |
Oil and Natural Gas Properties | Oil and Natural Gas Properties We follow the successful efforts method of accounting for our oil and natural gas properties. Under this method, exploration costs, such as exploratory geological and geophysical costs, expiration of unproved leasehold, delay rentals and exploration overhead are expensed as incurred. All costs related to production, general corporate overhead and similar activities are also expensed as incurred. All property acquisition costs and development costs are capitalized when incurred. Exploratory drilling costs are initially capitalized, or suspended, pending the determination of proved reserves. If proved reserves are found, drilling costs remain capitalized and are classified as proved properties. Costs of unsuccessful wells are charged to exploration expense. For exploratory wells that find reserves that cannot be classified as proved when drilling is completed, costs continue to be capitalized as suspended exploratory drilling costs if there have been sufficient reserves found to justify completion as a producing well and sufficient progress is being made in assessing the reserves and the economic and operational viability of the project. If we determine that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed. In some instances, this determination may take longer than one year. We review the status of all suspended exploratory drilling costs quarterly. Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of oil and natural gas, are capitalized. Costs of drilling and equipping successful wells, costs to construct or acquire facilities, and associated asset retirement costs are depreciated using the unit-of-production (UOP) method based on total estimated proved developed oil and gas reserves. Costs of acquiring proved properties, including leasehold acquisition costs transferred from unproved properties, are depleted using the UOP method based on total estimated proved developed and undeveloped reserves. Proceeds from the sales of individual oil and natural gas properties and the capitalized costs of individual properties sold or abandoned are credited and charged, respectively, to accumulated depreciation, depletion and amortization, if doing so does not materially impact the depletion rate of an amortization base. Generally, no gain or loss is recognized until an entire amortization base is sold. However, a gain or loss is recognized from the sale of less than an entire amortization base if the disposition is significant enough to materially impact the depletion rate of the remaining properties in the amortization base. When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, we compare unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on our estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized costs, the capitalized costs are reduced to fair value. Fair value is generally estimated using the income approach described in the ASC 820, Fair Value Measurements . If applicable, we utilize prices and other relevant information generated by market transactions involving assets and liabilities that are identical or comparable to the item being measured as the basis for determining fair value. The expected future cash flows used for impairment reviews and related fair value measurements are typically based on judgmental assessments of future production volumes, commodity prices, operating costs, and capital investment plans, considering all available information at the date of review. These assumptions are applied to develop future cash flow projections that are then discounted to estimated fair value, using a discount rate believed to be consistent with those applied by market participants. We have classified these fair value measurements as Level 3 in the fair value hierarchy. |
Capitalized Interest | Capitalized Interest Interest from external borrowings is capitalized on significant investments in major development projects until the asset is ready for service using the weighted average borrowing rate of outstanding borrowings. Capitalized interest is determined by multiplying our weighted average borrowing cost on debt by the average amount of qualifying costs incurred. Capitalized interest is depreciated over the useful lives of the assets in the same manner as the depreciation of the underlying asset. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued Auditing Standards Update (ASU) 2016-02, Leases (Topic 842) (“ASC 842”) , which requires lessees to recognize a lease liability and a right-of-use (ROU) asset on the balance sheet for all leases, including operating leases, with terms in excess of 12 months. As the implicit rate of the lease is not always readily determinable, the company uses its incremental borrowing rate to calculate the present value of lease payments based on information available at the commencement date. Operating ROU assets are included in other long-term assets while operating lease liabilities are included in other current and other long-term liabilities on the condensed consolidated balance sheet. Finance ROU assets are reflected in total property and equipment, net, while finance lease liabilities are included in other current and other long-term liabilities on the condensed consolidated balance sheet. ASC 842 does not apply to our leases of mineral rights to explore for or use oil and natural gas resources, including the intangible rights to explore for those natural resources and rights to use the land in which those natural resources are contained. We adopted the new standard on January 1, 2019 and as permitted by ASU 2018-11, Leases (Topic 842): Targeted Improvements , we will not adjust comparative-period financial statements and will continue to apply the guidance in Topic 840, including its disclosure requirements, in the comparative periods presented prior to adoption. No cumulative-effect adjustment to retained earnings was required as a result of the modified retrospective approach. Upon adoption of ASC 842, we made certain elections permitting us to not reassess: (1) whether any expired or existing contracts contained leases (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. Upon adoption of ASC 842, we also made an election permitting us to continue applying our current policy for land easements. The adoption of ASC 842 did not result in a material impact on our balance sheet, results of operations or cash flows. Short-term leases will not be recognized on the balance sheet as an asset or a liability, and the related rental expense will be expensed as incurred. We have short-term lease agreements related to most of our drilling rig arrangements and hydraulic fracturing arrangements and some of our compressor rental arrangements. See Note 9 for further information regarding leases. |
Change in Accounting Principle
Change in Accounting Principle (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of changes in accounting principles | Three Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 1,170 $ — $ 1,170 Marketing 889 — 889 Total Revenues 2,059 — 2,059 Other — 15 15 Gains on sales of assets — 13 13 Total Revenues and Other 2,059 28 2,087 OPERATING EXPENSES: Oil, natural gas and NGL production 155 — 155 Oil, natural gas and NGL gathering, processing and transportation 270 — 270 Production taxes 35 — 35 Exploration — 17 17 Marketing 901 — 901 General and administrative 52 14 66 Depreciation, depletion and amortization 421 152 573 Impairments 1 8 9 Other operating expense 15 — 15 Total Operating Expenses 1,850 191 2,041 INCOME FROM OPERATIONS 209 (163 ) 46 OTHER INCOME (EXPENSE): Interest expense (134 ) (43 ) (177 ) Losses on investments (4 ) — (4 ) Gains on purchases or exchanges of debt 70 — 70 Other income 2 1 3 Total Other Expense (66 ) (42 ) (108 ) INCOME (LOSS) BEFORE INCOME TAXES 143 (205 ) (62 ) Income tax benefit (1 ) — (1 ) NET INCOME (LOSS) 144 (205 ) (61 ) Net loss attributable to noncontrolling interests — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 144 (205 ) (61 ) Preferred stock dividends (23 ) — (23 ) Loss on exchange of preferred stock (17 ) — (17 ) NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 104 $ (205 ) $ (101 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.06 $ (0.12 ) $ (0.06 ) Diluted $ 0.06 $ (0.12 ) $ (0.06 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 1,698 — 1,698 Diluted 1,698 — 1,698 Three Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Full Cost Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 1,199 $ — $ 1,199 Marketing 1,219 — 1,219 Total Revenues 2,418 — 2,418 Other — 16 16 Losses on sales of assets — (10 ) (10 ) Total Revenues and Other 2,418 6 2,424 OPERATING EXPENSES: Oil, natural gas and NGL production 132 — 132 Oil, natural gas and NGL gathering, processing and transportation 364 — 364 Production taxes 34 — 34 Exploration — 22 22 Marketing 1,238 — 1,238 General and administrative 66 15 81 Provision for legal contingencies, net 8 — 8 Depreciation, depletion and amortization 291 114 405 Impairments 5 53 58 Total Operating Expenses 2,138 204 2,342 INCOME FROM OPERATIONS 280 (198 ) 82 OTHER INCOME (EXPENSE): Interest expense (127 ) (38 ) (165 ) Losses on purchases or exchanges of debt (68 ) — (68 ) Other income 1 5 6 Total Other Expense (194 ) (33 ) (227 ) INCOME (LOSS) BEFORE INCOME TAXES 86 (231 ) (145 ) Income tax expense 1 — 1 NET INCOME (LOSS) 85 (231 ) (146 ) Net income attributable to noncontrolling interests (1 ) 1 — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 84 (230 ) (146 ) Preferred stock dividends (23 ) — (23 ) Earnings allocated to participating securities (1 ) 1 — NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 60 $ (229 ) $ (169 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.07 $ (0.26 ) $ (0.19 ) Diluted $ 0.07 $ (0.26 ) $ (0.19 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 910 — 910 Diluted 911 (1 ) 910 Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 3,553 $ — $ 3,553 Marketing 3,038 — 3,038 Total Revenues 6,591 — 6,591 Other — 45 45 Gains on sales of assets — 33 33 Total Revenues and Other 6,591 78 6,669 OPERATING EXPENSES: Oil, natural gas and NGL production 453 — 453 Oil, natural gas and NGL gathering, processing and transportation 815 — 815 Production taxes 109 — 109 Exploration — 56 56 Marketing 3,071 — 3,071 General and administrative 216 42 258 Provision for legal contingencies 3 — 3 Depreciation, depletion and amortization 1,197 475 1,672 Gain on sale of oil and natural gas properties (10 ) 10 — Impairments 3 8 11 Other operating expense 79 — 79 Total Operating Expenses 5,936 591 6,527 INCOME FROM OPERATIONS 655 (513 ) 142 OTHER INCOME (EXPENSE): Interest expense (400 ) (113 ) (513 ) Losses on investments (28 ) — (28 ) Gains on purchases or exchanges of debt 70 — 70 Other income 22 8 30 Total Other Expense (336 ) (105 ) (441 ) INCOME (LOSS) BEFORE INCOME TAXES 319 (618 ) (299 ) Income tax benefit (315 ) — (315 ) NET INCOME 634 (618 ) 16 Net income attributable to noncontrolling interests (1 ) 1 — NET INCOME ATTRIBUTABLE TO CHESAPEAKE 633 (617 ) 16 Preferred stock dividends (69 ) — (69 ) Loss on exchange of preferred stock (17 ) — (17 ) Earnings allocated to participating securities (2 ) 2 — NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 545 $ (615 ) $ (70 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.35 $ (0.39 ) $ (0.04 ) Diluted $ 0.35 $ (0.39 ) $ (0.04 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 1,570 — 1,570 Diluted 1,570 — 1,570 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Under Full Cost Successful Under Successful Efforts ($ in millions except per share data) REVENUES AND OTHER: Oil, natural gas and NGL $ 3,424 $ — $ 3,424 Marketing 3,738 — 3,738 Total Revenues 7,162 — 7,162 Other — 48 48 Gains on sales of assets — 27 27 Total Revenues and Other 7,162 75 7,237 OPERATING EXPENSES: Oil, natural gas and NGL production 417 — 417 Oil, natural gas and NGL gathering, processing and transportation 1,060 — 1,060 Production taxes 91 — 91 Exploration — 123 123 Marketing 3,798 — 3,798 General and administrative 229 44 273 Restructuring and other termination costs 38 — 38 Provision for legal contingencies, net 17 — 17 Depreciation, depletion and amortization 867 468 1,335 Impairments 51 71 122 Other operating (income) expense 6 (7 ) (1 ) Total Operating Expenses 6,574 699 7,273 INCOME (LOSS) FROM OPERATIONS 588 (624 ) (36 ) OTHER INCOME (EXPENSE): Interest expense (367 ) (115 ) (482 ) Gains on investments 139 — 139 Losses on purchases or exchanges of debt (68 ) — (68 ) Other income 63 (1 ) 62 Total Other Expense (233 ) (116 ) (349 ) INCOME (LOSS) BEFORE INCOME TAXES 355 (740 ) (385 ) Income tax benefit (8 ) — (8 ) NET INCOME (LOSS) 363 (740 ) (377 ) Net income attributable to noncontrolling interests (3 ) 2 (1 ) NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 360 (738 ) (378 ) Preferred stock dividends (69 ) — (69 ) Earnings allocated to participating securities (3 ) 3 — NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 288 $ (735 ) $ (447 ) EARNINGS (LOSS) PER COMMON SHARE: Basic $ 0.32 $ (0.81 ) $ (0.49 ) Diluted $ 0.32 $ (0.81 ) $ (0.49 ) WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): Basic 909 — 909 Diluted 909 — 909 Three Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME (LOSS) $ 144 $ (205 ) $ (61 ) OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 8 — 8 Other Comprehensive Income 8 — 8 COMPREHENSIVE INCOME (LOSS) 152 (205 ) (53 ) COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS — — — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 152 $ (205 ) $ (53 ) Three Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME (LOSS) $ 85 $ (231 ) $ (146 ) OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 8 — 8 Other Comprehensive Income 8 — 8 COMPREHENSIVE INCOME (LOSS) 93 (231 ) (138 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1 ) 1 — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 92 $ (230 ) $ (138 ) Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME $ 634 $ (618 ) $ 16 OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 26 — 26 Other Comprehensive Income 26 — 26 COMPREHENSIVE INCOME 660 (618 ) 42 COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1 ) 1 — COMPREHENSIVE INCOME ATTRIBUTABLE TO CHESAPEAKE $ 659 $ (617 ) $ 42 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Successful Under Successful Efforts ($ in millions) NET INCOME (LOSS) $ 363 $ (740 ) $ (377 ) OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: Unrealized gains on derivative instruments — — — Reclassification of losses on settled derivative instruments 25 — 25 Other Comprehensive Income 25 — 25 COMPREHENSIVE INCOME (LOSS) 388 (740 ) (352 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (3 ) 2 (1 ) COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 385 $ (738 ) $ (353 ) Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Under Full Cost Successful Under Successful Efforts ($ in millions) CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 634 $ (618 ) $ 16 ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation, depletion and amortization 1,197 475 1,672 Deferred income tax benefit (314 ) — (314 ) Derivative losses, net (137 ) — (137 ) Cash receipts on derivative settlements, net 129 — 129 Stock-based compensation 24 — 24 Gains on sales of assets — (33 ) (33 ) Impairments 3 8 11 Exploration — 35 35 Losses on investments 21 — 21 Gains on purchases of debt (70 ) — (70 ) Other 33 9 42 Changes in assets and liabilities (169 ) (45 ) (214 ) Net Cash Provided By Operating Activities 1,351 (169 ) 1,182 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs (1,694 ) 54 (1,640 ) Business combination, net (353 ) — (353 ) Acquisitions of proved and unproved properties (146 ) 115 (31 ) Proceeds from divestitures of proved and unproved properties 110 — 110 Additions to other property and equipment (27 ) — (27 ) Proceeds from sales of other property and equipment 6 — 6 Net Cash Used In Investing Activities (2,104 ) 169 (1,935 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 8,805 — 8,805 Payments on revolving credit facility borrowings (7,495 ) — (7,495 ) Cash paid to purchase debt (457 ) — (457 ) Cash paid for preferred stock dividends (69 ) — (69 ) Distributions to noncontrolling interest owners (2 ) — (2 ) Other (19 ) — (19 ) Net Cash Provided By Financing Activities 763 — 763 Net increase in cash and cash equivalents 10 — 10 Cash and cash equivalents, beginning of period 4 — 4 Cash and cash equivalents, end of period $ 14 $ — $ 14 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Under Full Cost Successful Under Successful Efforts ($ in millions) CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) $ 363 $ (740 ) $ (377 ) ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation, depletion and amortization 867 468 1,335 Deferred income tax benefit (10 ) — (10 ) Derivative losses, net 500 — 500 Cash payments on derivative settlements, net (162 ) — (162 ) Stock-based compensation 25 — 25 Gains on sales of assets — (27 ) (27 ) Impairments 51 71 122 Exploration — 81 81 Gains on investments (139 ) — (139 ) Losses on purchases or exchanges of debt 68 — 68 Other (83 ) (7 ) (90 ) Changes in assets and liabilities 116 (47 ) 69 Net Cash Provided By Operating Activities 1,596 (201 ) 1,395 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs (1,482 ) 75 (1,407 ) Acquisitions of proved and unproved properties (244 ) 126 (118 ) Proceeds from divestitures of proved and unproved properties 395 — 395 Additions to other property and equipment (11 ) — (11 ) Proceeds from sales of other property and equipment 75 — 75 Proceeds from sales of investments 74 — 74 Net Cash Used In Investing Activities (1,193 ) 201 (992 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 9,095 — 9,095 Payments on revolving credit facility borrowings (9,231 ) — (9,231 ) Proceeds from issuance of senior notes, net 1,237 — 1,237 Cash paid to purchase debt (1,285 ) — (1,285 ) Extinguishment of other financing (122 ) — (122 ) Cash paid for preferred stock dividends (69 ) — (69 ) Distributions to noncontrolling interest owners (5 ) — (5 ) Other (24 ) — (24 ) Net Cash Used In Financing Activities (404 ) — (404 ) Net decrease in cash and cash equivalents (1 ) — (1 ) Cash and cash equivalents, beginning of period 5 — 5 Cash and cash equivalents, end of period $ 4 $ — $ 4 Three Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning of period $ 1,671 $ — $ 1,671 Exchange of 40,000 shares of preferred stock for common stock (40 ) — (40 ) Balance, end of period 1,631 — 1,631 COMMON STOCK: Balance, beginning of period 16 — 16 Exchange of senior notes and convertible senior notes 3 — 3 Exchange of preferred stock — — — Balance, end of period 19 — 19 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 16,380 — 16,380 Exchange of preferred stock for 10,367,950 shares of common stock 40 — 40 Exchange of senior notes for 235,563,519 shares of common stock 438 — 438 Exchange of convertible senior notes for 73,389,094 shares of common stock 134 — 134 Equity component of convertible notes repurchases (2 ) — (2 ) Stock-based compensation 8 — 8 Dividends on preferred stock (23 ) — (23 ) Balance, end of period 16,975 — 16,975 ACCUMULATED DEFICIT: Balance, beginning of period (15,171 ) 1,336 (13,835 ) Net income (loss) attributable to Chesapeake 144 (205 ) (61 ) Balance, end of period (15,027 ) 1,131 (13,896 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (5 ) — (5 ) Hedging activity 8 — 8 Balance, end of period 3 — 3 TREASURY STOCK – COMMON: Balance, beginning of period (36 ) — (36 ) Purchase of 53,337 shares for company benefit plans — — — Release of 37,301 shares from company benefit plans — — — Balance, end of period (36 ) — (36 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY 3,565 1,131 4,696 NONCONTROLLING INTERESTS: Balance, beginning of period 122 (83 ) 39 Net loss attributable to noncontrolling interests — — — Distributions to noncontrolling interest owners — — — Balance, end of period 122 (83 ) 39 TOTAL EQUITY $ 3,687 $ 1,048 $ 4,735 Three Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning and end of period $ 1,671 $ — $ 1,671 COMMON STOCK: Balance, beginning of period 9 — 9 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 14,408 — 14,408 Stock-based compensation 9 — 9 Dividends on preferred stock (23 ) — (23 ) Balance, end of period 14,394 — 14,394 ACCUMULATED DEFICIT: Balance, beginning of period (16,257 ) 1,887 (14,370 ) Net income (loss) attributable to Chesapeake 84 (230 ) (146 ) Balance, end of period (16,173 ) 1,657 (14,516 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (40 ) — (40 ) Hedging activity 8 — 8 Balance, end of period (32 ) — (32 ) TREASURY STOCK – COMMON: Balance, beginning of period (31 ) — (31 ) Purchase of 30,509 shares for company benefit plans — — — Release of 41,617 shares from company benefit plans — — — Balance, end of period (31 ) — (31 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY (DEFICIT) (162 ) 1,657 1,495 NONCONTROLLING INTERESTS: Balance, beginning of period 123 (81 ) 42 Net income attributable to noncontrolling interests 1 (1 ) — Distributions to noncontrolling interest owners (2 ) — (2 ) Balance, end of period 122 (82 ) 40 TOTAL EQUITY (DEFICIT) $ (40 ) $ 1,575 $ 1,535 Nine Months Ended September 30, 2019 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning of period $ 1,671 $ — $ 1,671 Exchange of 40,000 shares of preferred stock for common stock (40 ) — (40 ) Balance, end of period 1,631 — 1,631 COMMON STOCK: Balance, beginning of period 9 — 9 Common shares issued for WildHorse Merger 7 — 7 Exchange of senior notes and convertible senior notes 3 — 3 Exchange of preferred stock — — — Balance, end of period 19 — 19 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 14,378 — 14,378 Common shares issued for WildHorse Merger 2,030 — 2,030 Exchange of preferred stock for 10,367,950 shares of common stock 40 — 40 Exchange of senior notes for 235,563,519 shares of common stock 438 — 438 Exchange of convertible senior notes for 73,389,094 shares of common stock 134 — 134 Equity component of convertible notes repurchases (2 ) — (2 ) Stock-based compensation 26 — 26 Dividends on preferred stock (69 ) — (69 ) Balance, end of period 16,975 — 16,975 ACCUMULATED DEFICIT: Balance, beginning of period (15,660 ) 1,748 (13,912 ) Net income attributable to Chesapeake 633 (617 ) 16 Balance, end of period (15,027 ) 1,131 (13,896 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (23 ) — (23 ) Hedging activity 26 — 26 Balance, end of period 3 — 3 TREASURY STOCK – COMMON: Balance, beginning of period (31 ) — (31 ) Purchase of 2,673,903 shares for company benefit plans (7 ) — (7 ) Release of 296,864 shares from company benefit plans 2 — 2 Balance, end of period (36 ) — (36 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY 3,565 1,131 4,696 NONCONTROLLING INTERESTS: Balance, beginning of period 123 (82 ) 41 Net income (loss) attributable to noncontrolling interests 1 (1 ) — Distributions to noncontrolling interest owners (2 ) — (2 ) Balance, end of period 122 (83 ) 39 TOTAL EQUITY $ 3,687 $ 1,048 $ 4,735 Nine Months Ended September 30, 2018 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Under Successful Efforts Adjustment Under Successful Efforts ($ in millions) PREFERRED STOCK: Balance, beginning and end of period $ 1,671 $ — $ 1,671 COMMON STOCK: Balance, beginning and end of period 9 — 9 ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period 14,437 — 14,437 Stock-based compensation 26 — 26 Dividends on preferred stock (69 ) — (69 ) Balance, end of period 14,394 — 14,394 ACCUMULATED DEFICIT: Balance, beginning of period (16,525 ) 2,395 (14,130 ) Net income (loss) attributable to Chesapeake 360 (738 ) (378 ) Cumulative effect of accounting change (8 ) — (8 ) Balance, end of period (16,173 ) 1,657 (14,516 ) ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance, beginning of period (57 ) — (57 ) Hedging activity 25 — 25 Balance, end of period (32 ) — (32 ) TREASURY STOCK – COMMON: Balance, beginning of period (31 ) — (31 ) Purchase of 1,499,033 shares for company benefit plans (4 ) — (4 ) Release of 431,474 shares from company benefit plans 4 — 4 Balance, end of period (31 ) — (31 ) TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY (DEFICIT) (162 ) 1,657 1,495 NONCONTROLLING INTERESTS: Balance, beginning of period 124 (80 ) 44 Net income attributable to noncontrolling interests 3 (2 ) 1 Distributions to noncontrolling interest owners (5 ) — (5 ) Balance, end of period 122 (82 ) 40 TOTAL EQUITY (DEFICIT) $ (40 ) $ 1,575 $ 1,535 |
Oil and Natural Gas Property _2
Oil and Natural Gas Property Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of preliminary allocation of the total purchase price | The following table represents the preliminary allocation of the total purchase price of WildHorse to the identifiable assets acquired and the liabilities assumed based on the fair values as of the acquisition date. Certain data necessary to complete the purchase price allocation is not yet available, and includes, but is not limited to, valuation of pre-acquisition contingencies and final appraisals of assets acquired and liabilities assumed. We expect to complete the purchase price allocation during the 12-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate. Preliminary Purchase Price Allocation ($ in millions) Consideration: Cash $ 381 Fair value of Chesapeake’s common stock issued in the Merger (a) 2,037 Total consideration $ 2,418 Fair Value of Liabilities Assumed: Current liabilities $ 166 Long-term debt 1,379 Deferred tax liabilities 314 Other long-term liabilities 36 Amounts attributable to liabilities assumed $ 1,895 Fair Value of Assets Acquired: Cash and cash equivalents $ 28 Other current assets 128 Proved oil and natural gas properties 3,264 Unproved properties 756 Other property and equipment 77 Other long-term assets 60 Amounts attributable to assets acquired $ 4,313 Total identifiable net assets $ 2,418 ___________________________________________ (a) Based on 717,376,170 Chesapeake common shares issued at closing at $2.84 per share (closing price as of February 1, 2019). |
Schedule of pro forma financial information | The following unaudited pro forma financial information for the nine months ended September 30, 2019 and three and nine months ended September 30, 2018, respectively, is based on our historical consolidated financial statements adjusted to reflect as if the WildHorse acquisition had occurred on January 1, 2018. The information below reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including adjustments to conform the classification of expenses in WildHorse’s statements of operations to our classification for similar expenses and the estimated tax impact of pro forma adjustments. Three Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 ($ in millions except per share data) Revenues $ 2,607 $ 6,661 $ 7,692 Net income (loss) available to common stockholders $ (199 ) $ (85 ) $ (543 ) Earnings per common share: Basic $ (0.12 ) $ (0.05 ) $ (0.33 ) Diluted $ (0.12 ) $ (0.05 ) $ (0.33 ) |
Capitalized Exploratory Well _2
Capitalized Exploratory Well Costs (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Extractive Industries [Abstract] | |
Summary of changes in capitalized well costs | A summary of the changes in our capitalized well costs for the Current Period is detailed below. Additions pending the determination of proved reserves excludes amounts capitalized and subsequently charged to expense within the same year. 2019 ($ in millions) Balance as of January 1 $ 36 Additions pending the determination of proved reserves 14 Divestitures and other — Reclassifications to proved properties (18 ) Charges to exploration expense (8 ) Balance as of September 30 $ 24 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |
Securities excluded from calculation of diluted EPS | Shares of common stock for the following securities were excluded from the calculation of diluted EPS as the effect was antidilutive: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in millions) Common stock equivalent of our preferred stock outstanding 58 60 58 60 Common stock equivalent of our convertible senior notes outstanding 124 146 124 146 Common stock equivalent of our preferred stock outstanding prior to exchange 1 — 1 — Participating securities — 2 — 1 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Our long-term debt consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Principal Amount Carrying Principal Carrying ($ in millions) Floating rate senior notes due 2019 — — 380 380 6.625% senior notes due 2020 208 208 437 437 6.875% senior notes due 2020 93 93 227 227 6.125% senior notes due 2021 167 167 548 548 5.375% senior notes due 2021 127 127 267 267 4.875% senior notes due 2022 338 338 451 451 5.75% senior notes due 2023 209 209 338 338 7.00% senior notes due 2024 850 850 850 850 6.875% senior notes due 2025 (a) 618 621 — — 8.00% senior notes due 2025 1,245 1,237 1,300 1,291 5.5% convertible senior notes due 2026 (b) 1,064 758 1,250 866 7.5% senior notes due 2026 400 400 400 400 8.00% senior notes due 2026 919 885 — — 8.00% senior notes due 2027 1,090 1,089 1,300 1,299 2.25% contingent convertible senior notes due 2038 — — 1 1 Chesapeake revolving credit facility 1,504 1,504 419 419 BVL revolving credit facility (a) 900 900 — — Debt issuance costs — (46 ) — (53 ) Interest rate derivatives — 1 — 1 Total debt, net 9,732 9,341 8,168 7,722 Less current maturities of long-term debt, net (c) (208 ) (208 ) (381 ) (381 ) Total long-term debt, net $ 9,524 $ 9,133 $ 7,787 $ 7,341 ___________________________________________ (a) On February 1, 2019, we acquired the debt of WildHorse which consisted of 6.875% Senior Notes due 2025 and a revolving credit facility. We now refer to this debt as our BVL Senior Notes and our BVL revolving credit facility, respectively. See further discussion below. (b) We are required to account for the liability and equity components of our convertible debt instrument separately and to reflect interest expense through the first demand repurchase date, as applicable, at the interest rate of similar nonconvertible debt at the time of issuance. The applicable rate for our 5.5% Convertible Senior Notes due 2026 is 11.5% . Prior to maturity under certain circumstances and at the holder’s option, the notes are convertible. During the Current Quarter, the price of our common stock was below the threshold level for conversion and, as a result, the holders do not have the option to convert their notes in the fourth quarter of 2019. (c) As of September 30, 2019, net current maturities of long-term debt includes our 6.625% Senior Notes due August 2020. |
Schedule of private exchange offer for outstanding senior unsecured notes | In the Current Period, we issued at par approximately $919 million of 8.00% Senior Notes due 2026 (“2026 notes”) pursuant to a private exchange offer for the following outstanding senior unsecured notes: Notes Exchanged ($ in millions) 6.625% senior notes due 2020 $ 229 6.875% senior notes due 2020 134 6.125% senior notes due 2021 381 5.375% senior notes due 2021 140 Total $ 884 |
Schedule of fair value of debt | Fair value is compared to the carrying value, excluding the impact of interest rate derivatives, in the table below: September 30, 2019 December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value ($ in millions) Short-term debt (Level 1) $ 208 $ 208 $ 381 $ 379 Long-term debt (Level 1) $ 2,790 $ 2,245 $ 3,495 $ 3,173 Long-term debt (Level 2) $ 6,343 $ 4,980 $ 3,846 $ 3,644 |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual obligation | The aggregate undiscounted commitments under our gathering, processing and transportation agreements, excluding any reimbursement from working interest and royalty interest owners, credits for third-party volumes or future costs under cost-of-service agreements, are presented below: September 30, ($ in millions) Remainder of 2019 $ 201 2020 764 2021 673 2022 570 2023 480 2024 – 2035 2,731 Total $ 5,419 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other current liabilities | Other current liabilities as of September 30, 2019 and December 31, 2018 are detailed below: September 30, December 31, ($ in millions) Revenues and royalties due others $ 429 $ 687 Accrued drilling and production costs 474 258 Joint interest prepayments received 49 73 VPP deferred revenue (a) 56 59 Accrued compensation and benefits 156 202 Other accrued taxes 141 108 Other 185 212 Total other current liabilities $ 1,490 $ 1,599 |
Other long-term liabilities | Other long-term liabilities as of September 30, 2019 and December 31, 2018 are detailed below: September 30, December 31, ($ in millions) VPP deferred revenue (a) $ 22 $ 63 Unrecognized tax benefits 55 53 Other 109 103 Total other long-term liabilities $ 186 $ 219 ____________________________________________ (a) At the inception of our volumetric production payment (VPP) agreements, we (i) removed the proved reserves associated with the VPP, (ii) recognized VPP proceeds as deferred revenue which are being amortized on a unit-of-production basis to other revenue over the term of the VPP, (iii) retained responsibility for the production costs and capital costs related to VPP interests and (iv) ceased recognizing production associated with the VPP volumes. The remaining deferred revenue balance will be recognized in other revenues in the consolidated statement of operations through 2021, assuming the related VPP production volumes are delivered as scheduled. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of ROU assets and lease liabilities | The following table presents our ROU assets and lease liabilities as of September 30, 2019 . Financing Operating ($ in millions) ROU assets $ 20 $ 22 Lease liabilities: Current lease liabilities $ 9 $ 9 Long-term lease liabilities 11 16 Total lease liabilities $ 20 $ 25 |
Schedule of operating and financing lease additional information | Additional information for the Company’s operating and finance leases is presented below: Three Months Ended September 30, 2019 Nine Months Ended Lease cost: ($ in millions) Amortization of ROU assets $ 2 $ 6 Interest on lease liability — 1 Finance lease cost 2 7 Operating lease cost 7 24 Short-term lease cost 34 82 Total lease cost (a) $ 43 $ 113 Other information: Operating cash outflows from finance lease $ — $ 1 Operating cash outflows from operating leases $ 3 $ 8 Investing cash outflows from operating leases $ 38 $ 98 Financing cash outflows from finance lease $ 2 $ 6 Weighted-average remaining lease term - finance lease 2.25 years Weighted-average remaining lease term - operating leases 4.87 years Weighted-average discount rate - finance lease 7.50 % Weighted-average discount rate - operating leases 4.17 % ____________________________________________ (a) Includes $38 million and $98 million of capitalized lease costs for the Current Quarter and the Current Period, respectively. |
Schedule of maturity analysis of operating lease liabilities | Maturity analysis of finance lease liabilities and operating lease liabilities are presented below: September 30, 2019 Financing Lease Operating Leases ($ in millions) Remainder of 2019 $ 3 $ 2 2020 10 9 2021 10 5 2022 — 3 2023 — 2 Thereafter — 7 Total lease payments 23 28 Less imputed interest (3 ) (3 ) Present value of lease liabilities 20 25 Less current maturities (9 ) (9 ) Present value of lease liabilities, less current maturities $ 11 $ 16 The aggregate undiscounted minimum future lease payments under previous lease accounting standard, ASC 840, are presented below: December 31, 2018 Capital Lease Operating Leases ($ in millions) 2019 $ 10 $ 3 2020 10 1 2021 10 — Total minimum lease payments $ 30 $ 4 |
Schedule of maturity analysis of finance lease liabilities | Maturity analysis of finance lease liabilities and operating lease liabilities are presented below: September 30, 2019 Financing Lease Operating Leases ($ in millions) Remainder of 2019 $ 3 $ 2 2020 10 9 2021 10 5 2022 — 3 2023 — 2 Thereafter — 7 Total lease payments 23 28 Less imputed interest (3 ) (3 ) Present value of lease liabilities 20 25 Less current maturities (9 ) (9 ) Present value of lease liabilities, less current maturities $ 11 $ 16 The aggregate undiscounted minimum future lease payments under previous lease accounting standard, ASC 840, are presented below: December 31, 2018 Capital Lease Operating Leases ($ in millions) 2019 $ 10 $ 3 2020 10 1 2021 10 — Total minimum lease payments $ 30 $ 4 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table shows revenue disaggregated by operating area and product type, for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period: Three Months Ended September 30, 2019 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 158 $ — $ 158 Haynesville — 129 — 129 Eagle Ford 282 32 22 336 Brazos Valley 194 10 5 209 Powder River Basin 97 16 5 118 Mid-Continent 40 8 5 53 Revenue from contracts with customers 613 353 37 1,003 Gains on oil, natural gas and NGL derivatives 124 43 — 167 Oil, natural gas and NGL revenue $ 737 $ 396 $ 37 $ 1,170 Marketing revenue from contracts with customers $ 603 $ 165 $ 37 $ 805 Other marketing revenue 80 4 — 84 Losses on oil, natural gas and NGL derivatives — — — — Marketing revenue $ 683 $ 169 $ 37 $ 889 Three Months Ended September 30, 2018 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 184 $ — $ 184 Haynesville — 195 — 195 Eagle Ford 399 36 58 493 Powder River Basin 78 17 13 108 Mid-Continent 58 15 12 85 Utica 59 131 76 266 Revenue from contracts with customers 594 578 159 1,331 Losses on oil, natural gas and NGL derivatives (100 ) (18 ) (14 ) (132 ) Oil, natural gas and NGL revenue $ 494 $ 560 $ 145 $ 1,199 Marketing revenue from contracts with customers 707 211 112 1,030 Other marketing revenue 119 70 — 189 Marketing revenue $ 826 $ 281 $ 112 $ 1,219 Nine Months Ended September 30, 2019 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 656 $ — $ 656 Haynesville — 494 — 494 Eagle Ford 962 117 89 1,168 Brazos Valley 513 23 12 548 Powder River Basin 273 59 23 355 Mid-Continent 131 34 26 191 Revenue from contracts with customers 1,879 1,383 150 3,412 Gains (losses) on oil, natural gas and NGL derivatives (49 ) 190 — 141 Oil, natural gas and NGL revenue $ 1,830 $ 1,573 $ 150 $ 3,553 Marketing revenue from contracts with customers $ 1,830 $ 741 $ 202 $ 2,773 Other marketing revenue 230 38 — 268 Losses on oil, natural gas and NGL derivatives — (3 ) — (3 ) Marketing revenue $ 2,060 $ 776 $ 202 $ 3,038 Nine Months Ended September 30, 2018 Oil Natural Gas NGL Total ($ in millions) Marcellus $ — $ 646 $ — $ 646 Haynesville 2 603 — 605 Eagle Ford 1,148 120 143 1,411 Powder River Basin 173 40 30 243 Mid-Continent 196 63 42 301 Utica 179 350 189 718 Revenue from contracts with customers 1,698 1,822 404 3,924 Losses on oil, natural gas and NGL derivatives (388 ) (85 ) (27 ) (500 ) Oil, natural gas and NGL revenue $ 1,310 $ 1,737 $ 377 $ 3,424 Marketing revenue from contracts with customers 2,125 733 324 3,182 Other marketing revenue 381 175 — 556 Marketing revenue $ 2,506 $ 908 $ 324 $ 3,738 |
Schedule of accounts receivable | Accounts receivable as of September 30, 2019 and December 31, 2018 are detailed below: September 30, 2019 December 31, 2018 ($ in millions) Oil, natural gas and NGL sales $ 644 $ 976 Joint interest 290 211 Other 64 77 Allowance for doubtful accounts (21 ) (17 ) Total accounts receivable, net $ 977 $ 1,247 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Summary of changes in common shares issued | A summary of the changes in our common shares issued is detailed below. Three Months Ended September 30, Nine Months Ended, September 30, 2019 2018 2019 2018 (in thousands) Beginning balance 1,634,486 913,271 913,716 908,733 Common shares issued for WildHorse Merger (a) — — 717,376 — Exchange of convertible notes (b) 73,389 — 73,389 — Exchange of senior notes (b) 235,564 — 235,564 — Exchange of preferred stock (c) 10,368 — 10,368 — Restricted stock issuances (net of forfeitures and cancellations) (d) 344 421 3,738 4,959 Ending balance 1,954,151 913,692 1,954,151 913,692 ____________________________________________ (a) See Note 3 for discussion of WildHorse Merger. (b) See Note 6 for discussion of debt exchanges. (c) In the Current Quarter, we exchanged 10,367,950 shares of common stock for 40,000 shares of our 5.75% (Series A) Cumulative Convertible Preferred Stock. In connection with the exchange, we recognized a loss equal to the excess of the fair value of all common stock issued in exchange for the preferred stock over the fair value of the common stock issuable pursuant to the original terms of the preferred stock. The loss of $17 million is reflected as a reduction to net income available to common stockholders for the purpose of calculating earnings per common share. (d) See Note 13 for discussion of restricted stock. |
Summary of changes in preferred stock outstanding | A summary of the changes in our outstanding shares of preferred stock is detailed below. 5.75% 5.75% (A) 4.50% 5.00% (2005B) (in thousands) Shares outstanding as of July 1, 2019 770 463 2,559 1,811 Exchange of preferred stock (a) — (40 ) — — Shares outstanding as of September 30, 2019 770 423 2,559 1,811 Shares outstanding as of July 1, 2018 770 463 2,559 1,811 Shares outstanding as of January 1, 2019 770 463 2,559 1,811 Exchange of preferred stock (a) — (40 ) — — Shares outstanding as of September 30, 2019 770 423 2,559 1,811 Shares outstanding as of January 1, 2018 770 463 2,559 1,811 Liquidation price per share $ 1,000 $ 1,000 $ 100 $ 100 ____________________________________________ (a) See discussion above regarding the exchange of our 5.75% (Series A) Cumulative Convertible Preferred Stock in the Current Quarter. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of the changes in unvested restricted stock | A summary of the changes in unvested restricted stock during the Current Period is presented below: Shares of Unvested Restricted Stock Weighted Average Grant Date Fair Value Per Share (in thousands) Unvested restricted stock as of January 1, 2019 11,858 $ 4.43 Granted 5,370 $ 2.85 Vested (5,439 ) $ 4.46 Forfeited (1,241 ) $ 3.75 Unvested restricted stock as of September 30, 2019 10,548 $ 3.69 |
Weighted average assumptions to estimate grant date fair value of the stock options granted | We utilized a Monte Carlo simulation for the TSR performance measure and the following assumptions to determine the grant date fair value and the reporting date fair value of the 2017 awards. Grant Date Assumptions Assumption 2017 Awards Volatility 80.65 % Risk-free interest rate 1.54 % Dividend yield for value of awards — % Reporting Period Assumptions Assumption 2017 Awards Volatility 95.41 % Risk-free interest rate 1.87 % Dividend yield for value of awards — % Expected option life – years 6.0 Volatility 65.61 % Risk-free interest rate 2.47 % Dividend yield — % |
Schedule of stock option activity | The following table provides information related to stock option activity in the Current Period: Number of Shares Underlying Options Weighted Average Exercise Price Per Share Weighted Average Contract Life in Years Aggregate Intrinsic Value (a) (in thousands) ($ in millions) Outstanding as of January 1, 2019 18,096 $ 7.20 7.15 $ — Granted 1,000 $ 2.97 Exercised — $ — $ — Expired (487 ) $ 6.49 Forfeited (589 ) $ 3.92 Outstanding as of September 30, 2019 18,020 $ 7.09 6.12 $ — Exercisable as of September 30, 2019 12,999 $ 8.30 5.31 $ — ___________________________________________ (a) The intrinsic value of a stock option is the amount by which the current market value or the market value upon exercise of the underlying stock exceeds the exercise price of the option. |
Restricted stock and stock option compensation | We recognized the following compensation costs, net of actual forfeitures, related to our liability-classified awards for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period. Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) General and administrative expenses $ (1 ) $ (1 ) $ 7 $ 20 Oil and natural gas properties 1 1 2 2 Oil, natural gas and NGL production expenses — 1 3 3 Exploration expenses — — — 1 Total liability-classified awards compensation $ — $ 1 $ 12 $ 26 Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) General and administrative expenses $ 6 $ 7 $ 21 $ 24 Oil and natural gas properties 1 — 2 2 Oil, natural gas and NGL production expenses 1 1 3 4 Exploration expenses — — — — Total restricted stock and stock option compensation $ 8 $ 8 $ 26 $ 30 |
Summary of liability classified awards | The following table presents a summary of our liability-classified awards: Grant Date Fair Value September 30, 2019 Units Fair Value Vested Liability ($ in millions) ($ in millions) 2019 PSU Awards: Payable 2020, 2021 and 2022 4,785,372 $ 14 $ 7 $ — 2018 PSU Awards: Payable 2020 and 2021 2,388,185 $ 7 $ 3 $ — 2017 PSU Awards: Payable 2020 1,174,973 $ 8 $ 1 $ 1 2018 CRSU Awards: Payable 2020 and 2021 9,267,227 $ 28 $ 13 $ — |
Derivative and Hedging Activi_2
Derivative and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of estimated fair values of oil, natural gas and NGL derivative instruments | The estimated fair values of our oil, natural gas and NGL derivative instrument assets (liabilities) as of September 30, 2019 and December 31, 2018 are provided below: September 30, 2019 December 31, 2018 Notional Volume Fair Value Notional Volume Fair Value ($ in millions) ($ in millions) Oil (mmbbl): Fixed-price swaps 22 $ 152 12 $ 157 Collars 3 33 8 98 Call swaptions 2 (1 ) — — Put options 1 (2 ) — — Basis protection swaps 2 4 7 5 Total oil 30 186 27 260 Natural gas (bcf): Fixed-price swaps 383 139 623 26 Three-way collars 15 3 88 1 Collars 9 3 55 (3 ) Call options 28 — 44 — Call swaptions 136 (7 ) 106 (9 ) Basis protection swaps 54 (1 ) 50 — Total natural gas 625 137 966 15 Contingent consideration: Utica divestiture — 7 Total estimated fair value $ 323 $ 282 |
Schedule of effect of derivative instruments, condensed consolidated balance sheets | The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 on a gross basis and after same-counterparty netting: Balance Sheet Classification Gross Fair Value Amounts Netted in the Consolidated Balance Sheets Net Fair Value Presented in the Consolidated Balance Sheet ($ in millions) As of September 30, 2019 Commodity Contracts: Short-term derivative asset $ 294 $ (22 ) $ 272 Long-term derivative asset 55 (4 ) 51 Short-term derivative liability (22 ) 22 — Long-term derivative liability (4 ) 4 — Contingent Consideration: Short-term derivative asset — — — Total derivatives $ 323 $ — $ 323 As of December 31, 2018 Commodity Contracts: Short-term derivative asset $ 306 $ (104 ) $ 202 Long-term derivative asset 117 (41 ) 76 Short-term derivative liability (107 ) 104 (3 ) Long-term derivative liability (41 ) 41 — Contingent Consideration: Short-term derivative asset 7 — 7 Total derivatives $ 282 $ — $ 282 |
Schedule of effect of derivative instruments, condensed consolidated statements of operations | The components of oil, natural gas and NGL revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below: Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) Oil, natural gas and NGL revenues $ 1,003 $ 1,331 $ 3,412 $ 3,924 Gains (losses) on undesignated oil, natural gas and NGL derivatives 175 (124 ) 167 (475 ) Losses on terminated cash flow hedges (8 ) (8 ) (26 ) (25 ) Total oil, natural gas and NGL revenues $ 1,170 $ 1,199 $ 3,553 $ 3,424 The components of marketing revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below: Three Months Ended Nine Months Ended 2019 2018 2019 2018 ($ in millions) Marketing revenues $ 889 $ 1,219 $ 3,042 $ 3,738 Losses on undesignated marketing natural gas derivatives — — (4 ) — Total marketing revenues $ 889 $ 1,219 $ 3,038 $ 3,738 |
Schedule of effect of derivative instruments, accumulated other comprehensive income (loss) | A reconciliation of the changes in accumulated other comprehensive income (loss) in our condensed consolidated statements of stockholders’ equity related to our cash flow hedges is presented below: Three Months Ended September 30, 2019 2018 Before After Before After ($ in millions) Balance, beginning of period $ (62 ) $ (5 ) $ (97 ) (40 ) Losses reclassified to income 8 8 8 8 Balance, end of period $ (54 ) $ 3 $ (89 ) $ (32 ) Nine Months Ended September 30, 2019 2018 Before After Before After ($ in millions) Balance, beginning of period $ (80 ) $ (23 ) $ (114 ) (57 ) Losses reclassified to income 26 26 25 25 Balance, end of period $ (54 ) $ 3 $ (89 ) $ (32 ) |
Schedule of financial assets (liabilities) | The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ($ in millions) As of September 30, 2019 Derivative Assets (Liabilities): Commodity assets $ — $ 307 $ 40 $ 347 Commodity liabilities — (16 ) (8 ) (24 ) Utica divestiture contingent consideration — — — — Total derivatives $ — $ 291 $ 32 $ 323 As of December 31, 2018 Derivative Assets (Liabilities): Commodity assets $ — $ 319 $ 103 $ 422 Commodity liabilities — (131 ) (16 ) (147 ) Utica divestiture contingent consideration — — 7 7 Total derivatives $ — $ 188 $ 94 $ 282 A summary of the changes in the fair values of our financial assets (liabilities) classified as Level 3 during the Current Period and the Prior Period is presented below: Commodity Derivatives Utica Contingent Consideration ($ in millions) Balance, as of January 1, 2019 $ 87 $ 7 Total gains (losses) (realized/unrealized): Included in earnings (a) (47 ) (7 ) Total purchases, issuances, sales and settlements: Settlements (8 ) — Balance, as of September 30, 2019 $ 32 $ — Balance, as of January 1, 2018 $ (15 ) $ — Total gains (losses) (realized/unrealized): Included in earnings (a) (3 ) — Total purchases, issuances, sales and settlements: Settlements 13 — Balance, as of September 30, 2018 $ (5 ) $ — ___________________________________________ (a) Commodity Derivatives Utica Contingent Consideration 2019 2018 2019 2018 ($ in millions) Total gains (losses) included in earnings for the period $ (47 ) $ (3 ) $ (7 ) $ — Change in unrealized gains (losses) related to assets still held at reporting date $ (57 ) $ (3 ) $ (7 ) $ — September 30, 2019 and December 31, 2018: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ($ in millions) As of September 30, 2019 Financial Assets (Liabilities): Other current assets $ 46 $ — $ — $ 46 Other current liabilities (45 ) — — (45 ) Total $ 1 $ — $ — $ 1 As of December 31, 2018 Financial Assets (Liabilities): Other current assets $ 50 $ — $ — $ 50 Other current liabilities (51 ) — — (51 ) Total $ (1 ) $ — $ — $ (1 ) |
Schedule of quantitative information about level 3 inputs used | The following table presents quantitative information about Level 3 inputs used in the fair value measurement of our commodity derivative contracts at fair value as of September 30, 2019 : Instrument Type Unobservable Input Range Weighted Average Fair Value ($ in millions) Oil trades Oil price volatility curves 24.62% – 48.77% 32.55% $ 33 Natural gas trades Natural gas price volatility curves 13.37% – 145.37% 37.40% $ (1 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurement of financial assets (liabilities) measured at fair value on a recurring basis | The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ($ in millions) As of September 30, 2019 Derivative Assets (Liabilities): Commodity assets $ — $ 307 $ 40 $ 347 Commodity liabilities — (16 ) (8 ) (24 ) Utica divestiture contingent consideration — — — — Total derivatives $ — $ 291 $ 32 $ 323 As of December 31, 2018 Derivative Assets (Liabilities): Commodity assets $ — $ 319 $ 103 $ 422 Commodity liabilities — (131 ) (16 ) (147 ) Utica divestiture contingent consideration — — 7 7 Total derivatives $ — $ 188 $ 94 $ 282 A summary of the changes in the fair values of our financial assets (liabilities) classified as Level 3 during the Current Period and the Prior Period is presented below: Commodity Derivatives Utica Contingent Consideration ($ in millions) Balance, as of January 1, 2019 $ 87 $ 7 Total gains (losses) (realized/unrealized): Included in earnings (a) (47 ) (7 ) Total purchases, issuances, sales and settlements: Settlements (8 ) — Balance, as of September 30, 2019 $ 32 $ — Balance, as of January 1, 2018 $ (15 ) $ — Total gains (losses) (realized/unrealized): Included in earnings (a) (3 ) — Total purchases, issuances, sales and settlements: Settlements 13 — Balance, as of September 30, 2018 $ (5 ) $ — ___________________________________________ (a) Commodity Derivatives Utica Contingent Consideration 2019 2018 2019 2018 ($ in millions) Total gains (losses) included in earnings for the period $ (47 ) $ (3 ) $ (7 ) $ — Change in unrealized gains (losses) related to assets still held at reporting date $ (57 ) $ (3 ) $ (7 ) $ — September 30, 2019 and December 31, 2018: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ($ in millions) As of September 30, 2019 Financial Assets (Liabilities): Other current assets $ 46 $ — $ — $ 46 Other current liabilities (45 ) — — (45 ) Total $ 1 $ — $ — $ 1 As of December 31, 2018 Financial Assets (Liabilities): Other current assets $ 50 $ — $ — $ 50 Other current liabilities (51 ) — — (51 ) Total $ (1 ) $ — $ — $ (1 ) |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidated Balance Sheets | CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated CURRENT ASSETS: Cash and cash equivalents $ 8 $ 1 $ 10 $ (5 ) $ 14 Other current assets 56 1,231 102 — 1,389 Intercompany receivable, net 6,275 — — (6,275 ) — Total Current Assets 6,339 1,232 112 (6,280 ) 1,403 PROPERTY AND EQUIPMENT: Oil and natural gas properties, at cost based on successful efforts accounting, net — 9,513 4,221 — 13,734 Other property and equipment, net — 1,046 86 — 1,132 Property and equipment held for sale, net — 10 — — 10 Total Property and Equipment, Net — 10,569 4,307 — 14,876 LONG-TERM ASSETS: Other long-term assets 336 231 30 (297 ) 300 Investments in subsidiaries and intercompany advances 6,013 2,338 — (8,351 ) — TOTAL ASSETS $ 12,688 $ 14,370 $ 4,449 $ (14,928 ) $ 16,579 CURRENT LIABILITIES: Current liabilities $ 325 $ 1,805 $ 223 $ (5 ) $ 2,348 Intercompany payable, net — 6,275 — (6,275 ) — Total Current Liabilities 325 8,080 223 (6,280 ) 2,348 LONG-TERM LIABILITIES: Long-term debt, net 7,612 — 1,521 — 9,133 Deferred income tax liabilities — — 297 (297 ) — Other long-term liabilities 55 277 31 — 363 Total Long-Term Liabilities 7,667 277 1,849 (297 ) 9,496 EQUITY: Chesapeake stockholders’ equity 4,696 6,013 2,338 (8,351 ) 4,696 Noncontrolling interests — — 39 — 39 Total Equity 4,696 6,013 2,377 (8,351 ) 4,735 TOTAL LIABILITIES AND EQUITY $ 12,688 $ 14,370 $ 4,449 $ (14,928 ) $ 16,579 CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2018 ($ in millions) Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated CURRENT ASSETS: Cash and cash equivalents $ 4 $ 1 $ 1 $ (2 ) $ 4 Other current assets 60 1,532 2 — 1,594 Intercompany receivable, net 6,671 — — (6,671 ) — Total Current Assets 6,735 1,533 3 (6,673 ) 1,598 PROPERTY AND EQUIPMENT: Oil and natural gas properties, at cost based on successful efforts accounting, net — 9,664 48 — 9,712 Other property and equipment, net — 1,091 — — 1,091 Property and equipment held for sale, net — 15 — — 15 Total Property and Equipment, Net — 10,770 48 — 10,818 LONG-TERM ASSETS: Other long-term assets 26 293 — — 319 Investments in subsidiaries and intercompany advances 3,248 9 — (3,257 ) — TOTAL ASSETS $ 10,009 $ 12,605 $ 51 $ (9,930 ) $ 12,735 CURRENT LIABILITIES: Current liabilities $ 523 $ 2,365 $ 1 $ (2 ) $ 2,887 Intercompany payable, net — 6,671 — (6,671 ) — Total Current Liabilities 523 9,036 1 (6,673 ) 2,887 LONG-TERM LIABILITIES: Long-term debt, net 7,341 — — — 7,341 Other long-term liabilities 53 321 — — 374 Total Long-Term Liabilities 7,394 321 — — 7,715 EQUITY: Chesapeake stockholders’ equity 2,092 3,248 9 (3,257 ) 2,092 Noncontrolling interests — — 41 — 41 Total Equity 2,092 3,248 50 (3,257 ) 2,133 TOTAL LIABILITIES AND EQUITY $ 10,009 $ 12,605 $ 51 $ (9,930 ) $ 12,735 |
Condensed Consolidated Income Statements | CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 932 $ 238 $ — $ 1,170 Marketing — 889 — — 889 Total Revenues — 1,821 238 — 2,059 Other — 15 — — 15 Gains on sales of assets — 13 — — 13 Total Revenues and Other — 1,849 238 — 2,087 OPERATING EXPENSES: Oil, natural gas and NGL production — 129 26 — 155 Oil, natural gas and NGL gathering, processing and transportation — 268 2 — 270 Production taxes — 25 10 — 35 Exploration — 17 — — 17 Marketing — 901 — — 901 General and administrative — 43 23 — 66 Depreciation, depletion and amortization — 421 152 — 573 Impairments — 9 — — 9 Other operating expense — 15 — — 15 Total Operating Expenses — 1,828 213 — 2,041 INCOME FROM OPERATIONS — 21 25 — 46 OTHER INCOME (EXPENSE): Interest income (expense) (161 ) 3 (19 ) — (177 ) Losses on investments — (4 ) — — (4 ) Gains on purchases or exchanges of debt 64 — 6 — 70 Other income — 3 — — 3 Equity in net earnings of subsidiary 25 2 — (27 ) — Total Other Income (Expense) (72 ) 4 (13 ) (27 ) (108 ) INCOME (LOSS) BEFORE INCOME TAXES (72 ) 25 12 (27 ) (62 ) INCOME TAX (BENEFIT) EXPENSE (11 ) — 10 — (1 ) NET INCOME (LOSS) (61 ) 25 2 (27 ) (61 ) Net loss attributable to noncontrolling interests — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE (61 ) 25 2 (27 ) (61 ) Other comprehensive income — 8 — — 8 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ (61 ) $ 33 $ 2 $ (27 ) $ (53 ) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2018 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 1,194 $ 5 $ — $ 1,199 Marketing — 1,219 — — 1,219 Total Revenues — 2,413 5 — 2,418 Other — 16 — — 16 Losses on sales of assets — (10 ) — — (10 ) Total Revenues and Other — 2,419 5 — 2,424 OPERATING EXPENSES: Oil, natural gas and NGL production — 132 — — 132 Oil, natural gas and NGL gathering, processing and transportation — 362 2 — 364 Production taxes — 33 1 — 34 Exploration — 22 — — 22 Marketing — 1,238 — — 1,238 General and administrative — 81 — — 81 Provision for legal contingencies, net — 8 — — 8 Depreciation, depletion and amortization — 403 2 — 405 Impairments — 58 — — 58 Total Operating Expenses — 2,337 5 — 2,342 INCOME FROM OPERATIONS — 82 — — 82 OTHER INCOME (EXPENSE): Interest expense (163 ) (2 ) — — (165 ) Losses on purchases or exchanges of debt (68 ) — — — (68 ) Other income — 6 — — 6 Equity in net earnings of subsidiary 86 — — (86 ) — Total Other Income (Expense) (145 ) 4 — (86 ) (227 ) INCOME (LOSS) BEFORE INCOME TAXES (145 ) 86 — (86 ) (145 ) INCOME TAX EXPENSE 1 — — — 1 NET INCOME (LOSS) (146 ) 86 — (86 ) (146 ) Net (income) loss attributable to noncontrolling interests — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE (146 ) 86 — (86 ) (146 ) Other comprehensive income — 8 — — 8 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ (146 ) $ 94 $ — $ (86 ) $ (138 ) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 3,000 $ 553 $ — $ 3,553 Marketing — 3,038 — — 3,038 Total Revenues — 6,038 553 — 6,591 Other — 45 — — 45 Gains on sales of assets — 33 — — 33 Total Revenues and Other — 6,116 553 — 6,669 OPERATING EXPENSES: Oil, natural gas and NGL production — 384 69 — 453 Oil, natural gas and NGL gathering, processing and transportation — 802 13 — 815 Production taxes — 83 26 — 109 Exploration — 53 3 — 56 Marketing — 3,071 — — 3,071 General and administrative — 193 65 — 258 Provision for legal contingencies, net — 3 — — 3 Depreciation, depletion and amortization — 1,295 377 — 1,672 Impairments — 11 — — 11 Other operating expense — 41 38 — 79 Total Operating Expenses — 5,936 591 — 6,527 INCOME (LOSS) FROM OPERATIONS — 180 (38 ) — 142 OTHER INCOME (EXPENSE): Interest income (expense) (475 ) 13 (51 ) — (513 ) Losses on investments — (4 ) (24 ) — (28 ) Gains on purchases or exchanges of debt 64 — 6 — 70 Other income — 28 2 — 30 Equity in net earnings of subsidiary 129 (88 ) — (41 ) — Total Other Expense (282 ) (51 ) (67 ) (41 ) (441 ) INCOME (LOSS) BEFORE INCOME TAXES (282 ) 129 (105 ) (41 ) (299 ) INCOME TAX BENEFIT (298 ) — (17 ) — (315 ) NET INCOME (LOSS) 16 129 (88 ) (41 ) 16 Net loss attributable to noncontrolling interests — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE 16 129 (88 ) (41 ) 16 Other comprehensive income — 26 — — 26 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ 16 $ 155 $ (88 ) $ (41 ) $ 42 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2018 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated REVENUES: Oil, natural gas and NGL $ — $ 3,410 $ 14 $ — $ 3,424 Marketing — 3,738 — — 3,738 Total Revenues — 7,148 14 — 7,162 Other — 48 — — 48 Gains on sales of assets — 27 — — 27 Total Revenues and Other — 7,223 14 — 7,237 OPERATING EXPENSES: Oil, natural gas and NGL production — 417 — — 417 Oil, natural gas and NGL gathering, processing and transportation — 1,055 5 — 1,060 Production taxes — 90 1 — 91 Exploration — 123 — — 123 Marketing — 3,798 — — 3,798 General and administrative — 272 1 — 273 Restructuring and other termination costs — 38 — — 38 Provision for legal contingencies, net — 17 — — 17 Depreciation, depletion and amortization — 1,330 5 — 1,335 Impairments — 122 — — 122 Other operating income — (1 ) — — (1 ) Total Operating Expenses — 7,261 12 — 7,273 INCOME (LOSS) FROM OPERATIONS — (38 ) 2 — (36 ) OTHER INCOME (EXPENSE): Interest expense (480 ) (2 ) — — (482 ) Gains on investments — 139 — — 139 Losses on purchases or exchanges of debt (68 ) — — — (68 ) Other income — 62 — — 62 Equity in net earnings of subsidiary 162 1 (1 ) (162 ) — Total Other Income (Expense) (386 ) 200 (1 ) (162 ) (349 ) INCOME (LOSS) BEFORE INCOME TAXES (386 ) 162 1 (162 ) (385 ) INCOME TAX BENEFIT (8 ) — — — (8 ) NET INCOME (LOSS) (378 ) 162 1 (162 ) (377 ) Net income attributable to noncontrolling interests — (1 ) — — (1 ) NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE (378 ) 161 1 (162 ) (378 ) Other comprehensive income — 25 — — 25 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE $ (378 ) $ 186 $ 1 $ (162 ) $ (353 ) |
Condensed Consolidated Cash Flow Statements | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2019 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash Provided By Operating Activities $ — $ 898 $ 287 $ (3 ) $ 1,182 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs — (1,204 ) (436 ) — (1,640 ) Business combination, net — (381 ) 28 — (353 ) Acquisitions of proved and unproved properties — (31 ) — — (31 ) Proceeds from divestitures of proved and unproved properties — 110 — — 110 Additions to other property and equipment — (12 ) (15 ) — (27 ) Other investing activities — 6 — — 6 Net Cash Used In Investing Activities — (1,512 ) (423 ) — (1,935 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 8,096 — 709 — 8,805 Payments on revolving credit facility borrowings (7,011 ) — (484 ) — (7,495 ) Cash paid to purchase debt (381 ) — (76 ) — (457 ) Cash paid for preferred stock dividends (69 ) — — — (69 ) Other financing activities (13 ) (6 ) (5 ) 3 (21 ) Intercompany advances, net (620 ) 620 1 (1 ) — Net Cash Provided By Financing Activities 2 614 145 2 763 Net increase in cash and cash equivalents 2 — 9 (1 ) 10 Cash and cash equivalents, beginning of period 4 1 1 (2 ) 4 Cash and cash equivalents, end of period $ 6 $ 1 $ 10 $ (3 ) $ 14 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2018 ($ in millions) Parent Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash Provided By Operating Activities $ 86 $ 1,312 $ 7 $ (10 ) $ 1,395 CASH FLOWS FROM INVESTING ACTIVITIES: Drilling and completion costs — (1,407 ) — — (1,407 ) Acquisitions of proved and unproved properties — (118 ) — — (118 ) Proceeds from divestitures of proved and unproved properties — 395 — — 395 Additions to other property and equipment — (11 ) — — (11 ) Other investing activities — 149 — — 149 Net Cash Used In Investing Activities — (992 ) — — (992 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility borrowings 9,095 — — — 9,095 Payments on revolving credit facility borrowings (9,231 ) — — — (9,231 ) Proceeds from issuance of senior notes, net 1,237 — — — 1,237 Cash paid to purchase debt (1,285 ) — — — (1,285 ) Cash paid for preferred stock dividends (69 ) — — — (69 ) Other financing activities (2 ) (127 ) (9 ) (13 ) (151 ) Intercompany advances, net 170 (193 ) 1 22 — Net Cash Used In Financing Activities (85 ) (320 ) (8 ) 9 (404 ) Net increase (decrease) in cash and cash equivalents 1 — (1 ) (1 ) (1 ) Cash and cash equivalents, beginning of period 5 1 2 (3 ) 5 Cash and cash equivalents, end of period $ 6 $ 1 $ 1 $ (4 ) $ 4 |
Change in Accounting Principl_2
Change in Accounting Principle - Statements of Operations (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||||
REVENUES AND OTHER: | |||||||
Revenues | $ 2,087 | $ 2,424 | [1] | $ 6,669 | $ 7,237 | [1] | |
Gains on sales of assets | 13 | (10) | [1] | 33 | 27 | [1],[2] | |
OPERATING EXPENSES: | |||||||
Production taxes | 35 | 34 | [1] | 109 | 91 | [1] | |
General and administrative | 66 | 81 | [1] | 258 | 273 | [1] | |
Restructuring and other termination costs | 0 | 0 | [1] | 0 | 38 | [1] | |
Provision for legal contingencies, net | 0 | 8 | [1] | 3 | 17 | [1] | |
Depreciation, depletion and amortization | 573 | 405 | [1] | 1,672 | 1,335 | [1],[2] | |
Impairments | 9 | 58 | [1] | 11 | 122 | [1],[2] | |
Gain on sale of oil and natural gas properties | 0 | ||||||
Other operating (income) expense | 15 | 0 | [1] | 79 | (1) | [1] | |
Total Operating Expenses | 2,041 | 2,342 | [1] | 6,527 | 7,273 | [1] | |
INCOME (LOSS) FROM OPERATIONS | 46 | 82 | [1] | 142 | (36) | [1] | |
OTHER INCOME (EXPENSE): | |||||||
Interest expense | (177) | (165) | [1] | (513) | (482) | [1] | |
Gains (losses) on investments | (4) | 0 | [1] | (28) | 139 | [1] | |
Gains (losses) on purchases or exchanges of debt | 70 | (68) | [1] | 70 | (68) | [1] | |
Other income | 3 | 6 | [1] | 30 | 62 | [1] | |
Total Other Expense | (108) | (227) | [1] | (441) | (349) | [1] | |
LOSS BEFORE INCOME TAXES | (62) | (145) | [1] | (299) | (385) | [1] | |
INCOME TAX (BENEFIT) EXPENSE | (1) | 1 | [1] | (315) | (8) | [1] | |
NET INCOME (LOSS) | (61) | (146) | [1],[3] | 16 | (377) | [1],[2],[3] | |
Net income attributable to noncontrolling interests | 0 | 0 | [1],[3] | 0 | (1) | [1],[3] | |
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (61) | (146) | [1] | 16 | (378) | [1] | |
Preferred stock dividends | (23) | (23) | [1] | (69) | (69) | [1] | |
Earnings allocated to participating securities | 0 | [1] | 0 | [1] | 0 | ||
Loss on exchange of preferred stock | (17) | 0 | [1] | (17) | 0 | [1] | |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (101) | $ (169) | [1] | $ (70) | $ (447) | [1] | |
EARNINGS (LOSS) PER COMMON SHARE: | |||||||
Basic (in dollars per share) | $ (0.06) | $ (0.19) | [1] | $ (0.04) | $ (0.49) | [1] | |
Diluted (in dollars per share) | $ (0.06) | $ (0.19) | [1] | $ (0.04) | $ (0.49) | [1] | |
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): | |||||||
Basic (in shares) | 1,698 | 910 | [1] | 1,570 | 909 | [1] | |
Diluted (in shares) | 1,698 | 910 | [1] | 1,570 | 909 | [1] | |
Oil, natural gas and NGL | |||||||
REVENUES AND OTHER: | |||||||
Revenues | $ 1,170 | $ 1,199 | [1] | $ 3,553 | $ 3,424 | [1] | |
Marketing | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 889 | 1,219 | [1] | 3,038 | 3,738 | [1] | |
OPERATING EXPENSES: | |||||||
Expense | 901 | 1,238 | [1] | 3,071 | 3,798 | [1] | |
Oil, natural gas and NGL and Marketing | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 2,059 | 2,418 | [1] | 6,591 | 7,162 | [1] | |
Other | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 15 | 16 | [1] | 45 | 48 | [1] | |
Oil, natural gas and NGL production | |||||||
OPERATING EXPENSES: | |||||||
Expense | 155 | 132 | [1] | 453 | 417 | [1] | |
Oil, natural gas and NGL gathering, processing and transportation | |||||||
OPERATING EXPENSES: | |||||||
Expense | 270 | 364 | [1] | 815 | 1,060 | [1] | |
Exploration | |||||||
OPERATING EXPENSES: | |||||||
Expense | 17 | 22 | [1] | 56 | 123 | [1] | |
Under Full Cost | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 2,059 | 2,418 | 6,591 | 7,162 | |||
Gains on sales of assets | 0 | 0 | 0 | 0 | |||
OPERATING EXPENSES: | |||||||
Production taxes | 35 | 34 | 109 | 91 | |||
General and administrative | 52 | 66 | 216 | 229 | |||
Restructuring and other termination costs | 38 | ||||||
Provision for legal contingencies, net | 8 | 3 | 17 | ||||
Depreciation, depletion and amortization | 421 | 291 | 1,197 | 867 | |||
Impairments | 1 | 5 | 3 | 51 | |||
Gain on sale of oil and natural gas properties | (10) | ||||||
Other operating (income) expense | 15 | 79 | 6 | ||||
Total Operating Expenses | 1,850 | 2,138 | 5,936 | 6,574 | |||
INCOME (LOSS) FROM OPERATIONS | 209 | 280 | 655 | 588 | |||
OTHER INCOME (EXPENSE): | |||||||
Interest expense | (134) | (127) | (400) | (367) | |||
Gains (losses) on investments | (4) | (28) | 139 | ||||
Gains (losses) on purchases or exchanges of debt | 70 | (68) | 70 | (68) | |||
Other income | 2 | 1 | 22 | 63 | |||
Total Other Expense | (66) | (194) | (336) | (233) | |||
LOSS BEFORE INCOME TAXES | 143 | 86 | 319 | 355 | |||
INCOME TAX (BENEFIT) EXPENSE | (1) | 1 | (315) | (8) | |||
NET INCOME (LOSS) | 144 | 85 | 634 | 363 | |||
Net income attributable to noncontrolling interests | 0 | (1) | (1) | (3) | |||
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | 84 | 633 | 360 | ||||
Preferred stock dividends | (23) | (23) | (69) | (69) | |||
Earnings allocated to participating securities | (1) | (2) | (3) | ||||
Loss on exchange of preferred stock | (17) | (17) | |||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ 104 | $ 60 | $ 545 | $ 288 | |||
EARNINGS (LOSS) PER COMMON SHARE: | |||||||
Basic (in dollars per share) | $ 0.06 | $ 0.07 | $ 0.35 | $ 0.32 | |||
Diluted (in dollars per share) | $ 0.06 | $ 0.07 | $ 0.35 | $ 0.32 | |||
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): | |||||||
Basic (in shares) | 1,698 | 910 | 1,570 | 909 | |||
Diluted (in shares) | 1,698 | 911 | 1,570 | 909 | |||
Under Full Cost | Oil, natural gas and NGL | |||||||
REVENUES AND OTHER: | |||||||
Revenues | $ 1,170 | $ 1,199 | $ 3,553 | $ 3,424 | |||
Under Full Cost | Marketing | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 889 | 1,219 | 3,038 | 3,738 | |||
OPERATING EXPENSES: | |||||||
Expense | 901 | 1,238 | 3,071 | 3,798 | |||
Under Full Cost | Oil, natural gas and NGL and Marketing | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 2,059 | 2,418 | 6,591 | 7,162 | |||
Under Full Cost | Other | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Under Full Cost | Oil, natural gas and NGL production | |||||||
OPERATING EXPENSES: | |||||||
Expense | 155 | 132 | 453 | 417 | |||
Under Full Cost | Oil, natural gas and NGL gathering, processing and transportation | |||||||
OPERATING EXPENSES: | |||||||
Expense | 270 | 364 | 815 | 1,060 | |||
Under Full Cost | Exploration | |||||||
OPERATING EXPENSES: | |||||||
Expense | 0 | 0 | 0 | 0 | |||
Successful Efforts Adjustment | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 28 | 6 | 78 | 75 | |||
Gains on sales of assets | 13 | (10) | 33 | 27 | |||
OPERATING EXPENSES: | |||||||
Production taxes | 0 | 0 | 0 | 0 | |||
General and administrative | 14 | 15 | 42 | 44 | |||
Restructuring and other termination costs | 0 | ||||||
Provision for legal contingencies, net | 0 | 0 | 0 | ||||
Depreciation, depletion and amortization | 152 | 114 | 475 | 468 | |||
Impairments | 8 | 53 | 8 | 71 | |||
Gain on sale of oil and natural gas properties | 10 | ||||||
Other operating (income) expense | 0 | 0 | (7) | ||||
Total Operating Expenses | 191 | 204 | 591 | 699 | |||
INCOME (LOSS) FROM OPERATIONS | (163) | (198) | (513) | (624) | |||
OTHER INCOME (EXPENSE): | |||||||
Interest expense | (43) | (38) | (113) | (115) | |||
Gains (losses) on investments | 0 | 0 | 0 | ||||
Gains (losses) on purchases or exchanges of debt | 0 | 0 | 0 | 0 | |||
Other income | 1 | 5 | 8 | (1) | |||
Total Other Expense | (42) | (33) | (105) | (116) | |||
LOSS BEFORE INCOME TAXES | (205) | (231) | (618) | (740) | |||
INCOME TAX (BENEFIT) EXPENSE | 0 | 0 | 0 | 0 | |||
NET INCOME (LOSS) | (205) | (231) | (618) | (740) | |||
Net income attributable to noncontrolling interests | 0 | 1 | 1 | 2 | |||
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (205) | (230) | (617) | (738) | |||
Preferred stock dividends | 0 | 0 | 0 | 0 | |||
Earnings allocated to participating securities | 1 | 2 | 3 | ||||
Loss on exchange of preferred stock | 0 | 0 | |||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (205) | $ (229) | $ (615) | $ (735) | |||
EARNINGS (LOSS) PER COMMON SHARE: | |||||||
Basic (in dollars per share) | $ (0.12) | $ (0.26) | $ (0.39) | $ (0.81) | |||
Diluted (in dollars per share) | $ (0.12) | $ (0.26) | $ (0.39) | $ (0.81) | |||
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): | |||||||
Basic (in shares) | 0 | 0 | 0 | 0 | |||
Diluted (in shares) | 0 | (1) | 0 | 0 | |||
Successful Efforts Adjustment | Oil, natural gas and NGL | |||||||
REVENUES AND OTHER: | |||||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 | |||
Successful Efforts Adjustment | Marketing | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
OPERATING EXPENSES: | |||||||
Expense | 0 | 0 | 0 | 0 | |||
Successful Efforts Adjustment | Oil, natural gas and NGL and Marketing | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Successful Efforts Adjustment | Other | |||||||
REVENUES AND OTHER: | |||||||
Revenues | 15 | 16 | 45 | 48 | |||
Successful Efforts Adjustment | Oil, natural gas and NGL production | |||||||
OPERATING EXPENSES: | |||||||
Expense | 0 | 0 | 0 | 0 | |||
Successful Efforts Adjustment | Oil, natural gas and NGL gathering, processing and transportation | |||||||
OPERATING EXPENSES: | |||||||
Expense | 0 | 0 | 0 | 0 | |||
Successful Efforts Adjustment | Exploration | |||||||
OPERATING EXPENSES: | |||||||
Expense | $ 17 | $ 22 | $ 56 | $ 123 | |||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Change in Accounting Principl_3
Change in Accounting Principle - Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
NET INCOME (LOSS) | $ (61) | $ (146) | [1],[2] | $ 16 | $ (377) | [1],[2],[3] | |
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: | |||||||
Unrealized gains on derivative instruments | [4] | 0 | 0 | ||||
Unrealized gains on derivative instruments | [1],[4] | 0 | 0 | ||||
Reclassification of losses on settled derivative instruments | [4] | 8 | 26 | ||||
Reclassification of losses on settled derivative instruments | [1],[4] | 8 | 25 | ||||
Other Comprehensive Income | 8 | 8 | [1] | 26 | 25 | [1] | |
COMPREHENSIVE INCOME (LOSS) | (53) | (138) | [1] | 42 | (352) | [1] | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | [1] | 0 | (1) | [1] | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (53) | (138) | [1] | 42 | (353) | [1] | |
Under Full Cost | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
NET INCOME (LOSS) | 144 | 85 | 634 | 363 | |||
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: | |||||||
Unrealized gains on derivative instruments | [4] | 0 | 0 | ||||
Unrealized gains on derivative instruments | [4] | 0 | 0 | ||||
Reclassification of losses on settled derivative instruments | 8 | 26 | |||||
Reclassification of losses on settled derivative instruments | 8 | 25 | |||||
Other Comprehensive Income | 8 | 8 | 26 | 25 | |||
COMPREHENSIVE INCOME (LOSS) | 152 | 93 | 660 | 388 | |||
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | (1) | (1) | (3) | |||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | 152 | 92 | 659 | 385 | |||
Successful Efforts Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
NET INCOME (LOSS) | (205) | (231) | (618) | (740) | |||
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX: | |||||||
Unrealized gains on derivative instruments | [4] | 0 | 0 | ||||
Unrealized gains on derivative instruments | [4] | 0 | 0 | ||||
Reclassification of losses on settled derivative instruments | 0 | 0 | |||||
Reclassification of losses on settled derivative instruments | 0 | 0 | |||||
Other Comprehensive Income | 0 | 0 | 0 | 0 | |||
COMPREHENSIVE INCOME (LOSS) | (205) | (231) | (618) | (740) | |||
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 1 | 1 | 2 | |||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | $ (205) | $ (230) | $ (617) | $ (738) | |||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||
[4] | Deferred tax activity incurred in other comprehensive income was offset by a valuation allowance. |
Change in Accounting Principl_4
Change in Accounting Principle - Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
NET INCOME (LOSS) | $ (61) | $ (146) | [1],[2] | $ 16 | $ (377) | [1],[2],[3] |
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED BY OPERATING ACTIVITIES: | ||||||
Depreciation, depletion and amortization | 573 | 405 | [2] | 1,672 | 1,335 | [2],[3] |
Deferred income tax benefit | (314) | (10) | [3] | |||
Derivative (gains) losses, net | (137) | 500 | [3] | |||
Cash receipts (payments) on derivative settlements, net | 129 | (162) | [3] | |||
Stock-based compensation | 24 | 25 | [3] | |||
Gains on sales of assets | (13) | 10 | [2] | (33) | (27) | [2],[3] |
Impairments | 9 | 58 | [2] | 11 | 122 | [2],[3] |
Exploration | 35 | 81 | [3] | |||
(Gains) losses on investments | 21 | (139) | [3] | |||
(Gains) losses on purchases or exchanges of debt | (70) | 68 | ||||
Other | 42 | (90) | [3] | |||
Changes in assets and liabilities | (214) | 69 | [3] | |||
Net Cash Provided By Operating Activities | 1,182 | 1,395 | [3] | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Drilling and completion costs | (1,640) | (1,407) | [3] | |||
Business combination, net | (353) | 0 | [3] | |||
Acquisitions of proved and unproved properties | (31) | (118) | [3] | |||
Proceeds from divestitures of proved and unproved properties | 110 | 395 | [3] | |||
Additions to other property and equipment | (27) | (11) | [3] | |||
Proceeds from sales of other property and equipment | 6 | 75 | [3] | |||
Proceeds from sales of investments | 0 | 74 | [3] | |||
Net Cash Used In Investing Activities | (1,935) | (992) | [3] | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from revolving credit facility borrowings | 8,805 | 9,095 | [3] | |||
Payments on revolving credit facility borrowings | (7,495) | (9,231) | [3] | |||
Proceeds from issuance of senior notes, net | 0 | 1,237 | [3] | |||
Cash paid to purchase debt | (457) | (1,285) | [3] | |||
Extinguishment of other financing | 0 | (122) | [3] | |||
Cash paid for preferred stock dividends | (69) | (69) | [3] | |||
Distributions to noncontrolling interest owners | (2) | (5) | [3] | |||
Other | (19) | (24) | [3] | |||
Net Cash Provided By (Used In) Financing Activities | 763 | (404) | [3] | |||
Net increase (decrease) in cash and cash equivalents | 10 | (1) | [3] | |||
Cash and cash equivalents, beginning of period | 4 | 5 | [3] | |||
Cash and cash equivalents, end of period | 14 | 4 | [3] | 14 | 4 | [3] |
Under Full Cost | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
NET INCOME (LOSS) | 144 | 85 | 634 | 363 | ||
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED BY OPERATING ACTIVITIES: | ||||||
Depreciation, depletion and amortization | 421 | 291 | 1,197 | 867 | ||
Deferred income tax benefit | (314) | (10) | ||||
Derivative (gains) losses, net | (137) | 500 | ||||
Cash receipts (payments) on derivative settlements, net | 129 | (162) | ||||
Stock-based compensation | 24 | 25 | ||||
Gains on sales of assets | 0 | 0 | 0 | 0 | ||
Impairments | 1 | 5 | 3 | 51 | ||
Exploration | 0 | 0 | ||||
(Gains) losses on investments | 21 | (139) | ||||
(Gains) losses on purchases or exchanges of debt | (70) | 68 | ||||
Other | 33 | (83) | ||||
Changes in assets and liabilities | (169) | 116 | ||||
Net Cash Provided By Operating Activities | 1,351 | 1,596 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Drilling and completion costs | (1,694) | (1,482) | ||||
Business combination, net | (353) | |||||
Acquisitions of proved and unproved properties | (146) | (244) | ||||
Proceeds from divestitures of proved and unproved properties | 110 | 395 | ||||
Additions to other property and equipment | (27) | (11) | ||||
Proceeds from sales of other property and equipment | 6 | 75 | ||||
Proceeds from sales of investments | 74 | |||||
Net Cash Used In Investing Activities | (2,104) | (1,193) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from revolving credit facility borrowings | 8,805 | 9,095 | ||||
Payments on revolving credit facility borrowings | (7,495) | (9,231) | ||||
Proceeds from issuance of senior notes, net | 1,237 | |||||
Cash paid to purchase debt | (457) | (1,285) | ||||
Extinguishment of other financing | (122) | |||||
Cash paid for preferred stock dividends | (69) | (69) | ||||
Distributions to noncontrolling interest owners | (2) | (5) | ||||
Other | (19) | (24) | ||||
Net Cash Provided By (Used In) Financing Activities | 763 | (404) | ||||
Net increase (decrease) in cash and cash equivalents | 10 | (1) | ||||
Cash and cash equivalents, beginning of period | 4 | 5 | ||||
Cash and cash equivalents, end of period | 14 | 4 | 14 | 4 | ||
Successful Efforts Adjustment | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
NET INCOME (LOSS) | (205) | (231) | (618) | (740) | ||
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED BY OPERATING ACTIVITIES: | ||||||
Depreciation, depletion and amortization | 152 | 114 | 475 | 468 | ||
Deferred income tax benefit | 0 | 0 | ||||
Derivative (gains) losses, net | 0 | 0 | ||||
Cash receipts (payments) on derivative settlements, net | 0 | 0 | ||||
Stock-based compensation | 0 | 0 | ||||
Gains on sales of assets | (13) | 10 | (33) | (27) | ||
Impairments | 8 | 53 | 8 | 71 | ||
Exploration | 35 | 81 | ||||
(Gains) losses on investments | 0 | 0 | ||||
(Gains) losses on purchases or exchanges of debt | 0 | 0 | ||||
Other | 9 | (7) | ||||
Changes in assets and liabilities | (45) | (47) | ||||
Net Cash Provided By Operating Activities | (169) | (201) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Drilling and completion costs | 54 | 75 | ||||
Business combination, net | 0 | |||||
Acquisitions of proved and unproved properties | 115 | 126 | ||||
Proceeds from divestitures of proved and unproved properties | 0 | 0 | ||||
Additions to other property and equipment | 0 | 0 | ||||
Proceeds from sales of other property and equipment | 0 | 0 | ||||
Proceeds from sales of investments | 0 | |||||
Net Cash Used In Investing Activities | 169 | 201 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from revolving credit facility borrowings | 0 | 0 | ||||
Payments on revolving credit facility borrowings | 0 | 0 | ||||
Proceeds from issuance of senior notes, net | 0 | |||||
Cash paid to purchase debt | 0 | 0 | ||||
Extinguishment of other financing | 0 | |||||
Cash paid for preferred stock dividends | 0 | 0 | ||||
Distributions to noncontrolling interest owners | 0 | 0 | ||||
Other | 0 | 0 | ||||
Net Cash Provided By (Used In) Financing Activities | 0 | 0 | ||||
Net increase (decrease) in cash and cash equivalents | 0 | 0 | ||||
Cash and cash equivalents, beginning of period | 0 | 0 | ||||
Cash and cash equivalents, end of period | $ 0 | $ 0 | $ 0 | $ 0 | ||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Change in Accounting Principl_5
Change in Accounting Principle - Statements of Shareholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | $ 2,092 | ||||||||||
Net income (loss) attributable to Chesapeake | $ (61) | $ (146) | [1] | 16 | $ (378) | [1] | |||||
Chesapeake stockholders’ equity, end of period | 4,696 | 4,696 | |||||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period | 41 | ||||||||||
Net income attributable to noncontrolling interests | 0 | 0 | [1],[2] | 0 | (1) | [1],[2] | |||||
Stockholders' equity attributable to noncontrolling interest, end of period | 39 | 39 | |||||||||
TOTAL EQUITY | 4,735 | 1,535 | [3] | 4,735 | 1,535 | [3] | $ 2,133 | ||||
PREFERRED STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 1,671 | 1,671 | [3] | 1,671 | 1,671 | [3] | |||||
Exchange of 40,000, 0, 40,000 and 0 shares of preferred stock for common stock | (40) | 0 | [3] | (40) | 0 | [3] | |||||
Chesapeake stockholders’ equity, end of period | $ 1,631 | $ 1,671 | [3] | $ 1,631 | $ 1,671 | [3] | |||||
Preferred stock exchanges (in shares) | 40,000 | 0 | 40,000 | 0 | |||||||
COMMON STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | $ 16 | $ 9 | [3] | $ 9 | $ 9 | [3] | |||||
Exchange of senior notes and convertible senior notes | 3 | 0 | [3] | 3 | 0 | [3] | |||||
Exchange of preferred stock | 0 | 0 | |||||||||
Common shares issued for WildHorse Merger | 0 | 0 | [3] | 7 | 0 | [3] | |||||
Chesapeake stockholders’ equity, end of period | 19 | 9 | [3] | 19 | 9 | [3] | |||||
ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 16,380 | 14,408 | [3] | 14,378 | 14,437 | [3] | |||||
Common shares issued for WildHorse Merger | 0 | 0 | [3] | 2,030 | 0 | [3] | |||||
Equity component of convertible notes repurchases | (2) | 0 | [3] | (2) | 0 | [3] | |||||
Stock-based compensation | 8 | 9 | [3] | 26 | 26 | [3] | |||||
Dividends on preferred stock | (23) | (23) | [3] | (69) | (69) | [3] | |||||
Chesapeake stockholders’ equity, end of period | 16,975 | 14,394 | [3] | 16,975 | 14,394 | [3] | |||||
ACCUMULATED DEFICIT | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | (13,835) | (14,370) | [3] | (13,912) | (14,130) | [3] | |||||
Net income (loss) attributable to Chesapeake | (61) | (146) | [3] | 16 | (378) | [3] | |||||
Cumulative effect of accounting change | $ 0 | $ (8) | [3] | ||||||||
Chesapeake stockholders’ equity, end of period | [3] | (13,896) | (14,516) | (13,896) | (14,516) | ||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | (5) | (40) | [3] | (23) | (57) | [3] | |||||
Hedging activity | 8 | 8 | [3] | 26 | 25 | [3] | |||||
Chesapeake stockholders’ equity, end of period | 3 | (32) | [3] | 3 | (32) | [3] | |||||
TREASURY STOCK – COMMON: | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | (36) | (31) | [3] | (31) | (31) | [3] | |||||
Purchase of 53,337, 30,509, 2,673,903, and 1,499,033 shares for company benefit plans | 0 | 0 | [3] | (7) | (4) | [3] | |||||
Release of 37,301, 41,617, 296,864 and 431,474 shares from company benefit plans | 0 | 0 | [3] | 2 | 4 | [3] | |||||
Chesapeake stockholders’ equity, end of period | $ (36) | $ (31) | [3] | $ (36) | $ (31) | [3] | |||||
Purchase of shares for company benefit plans (in shares) | 53,337 | 30,509 | 2,673,903 | 1,499,033 | |||||||
Release of shares from company benefit plans (in shares) | 37,301 | 41,617 | 296,864 | 431,474 | |||||||
TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, end of period | $ 4,696 | $ 1,495 | [3] | $ 4,696 | $ 1,495 | [3] | |||||
NONCONTROLLING INTERESTS: | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period | 39 | 42 | [3] | 41 | 44 | [3] | |||||
Net income attributable to noncontrolling interests | 0 | 0 | [3] | 0 | 1 | [3] | |||||
Distributions to noncontrolling interest owners | 0 | (2) | [3] | (2) | (5) | [3] | |||||
Stockholders' equity attributable to noncontrolling interest, end of period | 39 | 40 | [3] | 39 | 40 | [3] | |||||
Under Full Cost | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) attributable to Chesapeake | 84 | 633 | 360 | ||||||||
Net income attributable to noncontrolling interests | 0 | (1) | (1) | (3) | |||||||
TOTAL EQUITY | 3,687 | (40) | 3,687 | (40) | |||||||
Under Full Cost | PREFERRED STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 1,671 | 1,671 | 1,671 | 1,671 | |||||||
Exchange of 40,000, 0, 40,000 and 0 shares of preferred stock for common stock | (40) | (40) | |||||||||
Chesapeake stockholders’ equity, end of period | 1,631 | 1,671 | 1,631 | 1,671 | |||||||
Under Full Cost | COMMON STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 16 | 9 | 9 | 9 | |||||||
Exchange of senior notes and convertible senior notes | 3 | 3 | |||||||||
Exchange of preferred stock | 0 | 0 | |||||||||
Common shares issued for WildHorse Merger | 7 | ||||||||||
Chesapeake stockholders’ equity, end of period | 19 | 9 | 19 | 9 | |||||||
Under Full Cost | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 16,380 | 14,408 | 14,378 | 14,437 | |||||||
Common shares issued for WildHorse Merger | 2,030 | ||||||||||
Equity component of convertible notes repurchases | (2) | (2) | |||||||||
Stock-based compensation | 8 | 9 | 26 | 26 | |||||||
Dividends on preferred stock | (23) | (23) | (69) | (69) | |||||||
Chesapeake stockholders’ equity, end of period | 16,975 | 14,394 | 16,975 | 14,394 | |||||||
Under Full Cost | ACCUMULATED DEFICIT | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | (15,171) | (16,257) | (15,660) | (16,525) | |||||||
Net income (loss) attributable to Chesapeake | 144 | 84 | 360 | ||||||||
Cumulative effect of accounting change | (8) | ||||||||||
Chesapeake stockholders’ equity, end of period | (15,027) | (16,173) | (15,027) | (16,173) | |||||||
Under Full Cost | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | (5) | (40) | (23) | (57) | |||||||
Hedging activity | 8 | 8 | 26 | 25 | |||||||
Chesapeake stockholders’ equity, end of period | 3 | (32) | 3 | (32) | |||||||
Under Full Cost | TREASURY STOCK – COMMON: | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | (36) | (31) | (31) | (31) | |||||||
Purchase of 53,337, 30,509, 2,673,903, and 1,499,033 shares for company benefit plans | 0 | 0 | (7) | (4) | |||||||
Release of 37,301, 41,617, 296,864 and 431,474 shares from company benefit plans | 0 | 0 | 2 | 4 | |||||||
Chesapeake stockholders’ equity, end of period | (36) | (31) | (36) | (31) | |||||||
Under Full Cost | TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, end of period | 3,565 | (162) | 3,565 | (162) | |||||||
Under Full Cost | NONCONTROLLING INTERESTS: | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period | 122 | 123 | 123 | 124 | |||||||
Net income attributable to noncontrolling interests | 0 | 1 | 1 | 3 | |||||||
Distributions to noncontrolling interest owners | 0 | (2) | (2) | (5) | |||||||
Stockholders' equity attributable to noncontrolling interest, end of period | 122 | 122 | 122 | 122 | |||||||
Successful Efforts Adjustment | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) attributable to Chesapeake | (205) | (230) | (617) | (738) | |||||||
Net income attributable to noncontrolling interests | 0 | 1 | 1 | 2 | |||||||
TOTAL EQUITY | 1,048 | 1,575 | 1,048 | 1,575 | |||||||
Successful Efforts Adjustment | PREFERRED STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 0 | 0 | 0 | 0 | |||||||
Exchange of 40,000, 0, 40,000 and 0 shares of preferred stock for common stock | 0 | 0 | |||||||||
Chesapeake stockholders’ equity, end of period | 0 | 0 | 0 | 0 | |||||||
Successful Efforts Adjustment | COMMON STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 0 | 0 | 0 | 0 | |||||||
Exchange of senior notes and convertible senior notes | 0 | 0 | |||||||||
Exchange of preferred stock | 0 | 0 | |||||||||
Common shares issued for WildHorse Merger | 0 | ||||||||||
Chesapeake stockholders’ equity, end of period | 0 | 0 | 0 | 0 | |||||||
Successful Efforts Adjustment | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 0 | 0 | 0 | 0 | |||||||
Common shares issued for WildHorse Merger | 0 | ||||||||||
Equity component of convertible notes repurchases | 0 | 0 | |||||||||
Stock-based compensation | 0 | 0 | 0 | 0 | |||||||
Dividends on preferred stock | 0 | 0 | 0 | 0 | |||||||
Chesapeake stockholders’ equity, end of period | 0 | 0 | 0 | 0 | |||||||
Successful Efforts Adjustment | ACCUMULATED DEFICIT | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 1,336 | 1,887 | 1,748 | 2,395 | |||||||
Net income (loss) attributable to Chesapeake | (205) | (230) | (738) | ||||||||
Cumulative effect of accounting change | $ 0 | ||||||||||
Chesapeake stockholders’ equity, end of period | 1,131 | 1,657 | 1,131 | 1,657 | |||||||
Successful Efforts Adjustment | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 0 | 0 | 0 | 0 | |||||||
Hedging activity | 0 | 0 | 0 | 0 | |||||||
Chesapeake stockholders’ equity, end of period | 0 | 0 | 0 | 0 | |||||||
Successful Efforts Adjustment | TREASURY STOCK – COMMON: | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, beginning of period | 0 | 0 | 0 | 0 | |||||||
Purchase of 53,337, 30,509, 2,673,903, and 1,499,033 shares for company benefit plans | 0 | 0 | 0 | 0 | |||||||
Release of 37,301, 41,617, 296,864 and 431,474 shares from company benefit plans | 0 | 0 | 0 | 0 | |||||||
Chesapeake stockholders’ equity, end of period | 0 | 0 | 0 | 0 | |||||||
Successful Efforts Adjustment | TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Chesapeake stockholders’ equity, end of period | 1,131 | 1,657 | 1,131 | 1,657 | |||||||
Successful Efforts Adjustment | NONCONTROLLING INTERESTS: | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stockholders' equity attributable to noncontrolling interest, beginning of period | (83) | (81) | (82) | (80) | |||||||
Net income attributable to noncontrolling interests | 0 | (1) | (1) | (2) | |||||||
Distributions to noncontrolling interest owners | 0 | 0 | 0 | 0 | |||||||
Stockholders' equity attributable to noncontrolling interest, end of period | $ (83) | $ (82) | $ (83) | $ (82) | |||||||
Exchange of preferred stock for shares of common stock | COMMON STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Preferred stock exchanges (in shares) | 10,367,950 | 0 | 10,368,000 | 0 | |||||||
Exchange of preferred stock for shares of common stock | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of preferred stock | $ 40 | $ 0 | [3] | $ 40 | $ 0 | [3] | |||||
Preferred stock exchanges (in shares) | 10,367,950 | 0 | 10,367,950 | 0 | |||||||
Exchange of preferred stock for shares of common stock | Under Full Cost | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of preferred stock | $ 40 | $ 40 | |||||||||
Exchange of preferred stock for shares of common stock | Successful Efforts Adjustment | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of preferred stock | $ 0 | $ 0 | |||||||||
Exchange of senior notes for shares of common stock | COMMON STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Preferred stock exchanges (in shares) | 235,564,000 | 0 | 235,564,000 | 0 | |||||||
Exchange of senior notes for shares of common stock | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of notes | $ 438 | $ 0 | [3] | $ 438 | $ 0 | [3] | |||||
Preferred stock exchanges (in shares) | 235,563,519 | 0 | 235,563,519 | 0 | |||||||
Exchange of senior notes for shares of common stock | Under Full Cost | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of notes | $ 438 | $ 438 | |||||||||
Exchange of senior notes for shares of common stock | Successful Efforts Adjustment | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of notes | $ 0 | $ 0 | |||||||||
Exchange of convertible senior notes for common stock | COMMON STOCK | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Preferred stock exchanges (in shares) | 73,389,000 | 0 | 73,389,000 | 0 | |||||||
Exchange of convertible senior notes for common stock | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of notes | $ 134 | $ 0 | [3] | $ 134 | $ 0 | [3] | |||||
Preferred stock exchanges (in shares) | 73,389,094 | 0 | 73,389,094 | 0 | |||||||
Exchange of convertible senior notes for common stock | Under Full Cost | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of notes | $ 134 | $ 134 | |||||||||
Exchange of convertible senior notes for common stock | Successful Efforts Adjustment | ADDITIONAL PAID-IN CAPITAL | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of notes | $ 0 | $ 0 | |||||||||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||||||
[3] | Financial information for prior periods has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Oil and Natural Gas Property _3
Oil and Natural Gas Property Transactions - Narrative (Details) shares in Millions, $ in Millions | Feb. 01, 2019USD ($)shares | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2018USD ($)well | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($)awell | ||
Business Acquisition [Line Items] | |||||||||
Revenues | $ 2,087 | $ 2,424 | [1] | $ 6,669 | $ 7,237 | [1] | |||
Proceeds from divestitures of proved and unproved properties | 110 | 395 | [2] | ||||||
Mid-Continent | |||||||||
Business Acquisition [Line Items] | |||||||||
Proceeds from divestitures of proved and unproved properties | $ 491 | ||||||||
Number of net acres included in sale | a | 238,500 | ||||||||
Productive gas wells, number of wells, net | well | 3,200 | 3,200 | |||||||
Other properties | |||||||||
Business Acquisition [Line Items] | |||||||||
Proceeds from divestitures of proved and unproved properties | $ 28 | $ 8 | $ 110 | $ 31 | |||||
Wildhorse Resource Development Corporation | |||||||||
Business Acquisition [Line Items] | |||||||||
Common stock issued in the merger (in shares) | shares | 717.4 | ||||||||
Cash | $ 381 | ||||||||
Revenues | $ 543 | ||||||||
Operating expenses | 579 | ||||||||
Other expenses | $ 67 | ||||||||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | ||||||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Oil and Natural Gas Property _4
Oil and Natural Gas Property Transactions - Purchase Price Allocation (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 01, 2019 | Mar. 31, 2019 |
Fair Value of Assets Acquired: | ||
Common shares, outstanding (in shares) | 717,376,170 | |
Share price (in dollars per share) | $ 2.84 | |
Wildhorse Resource Development Corporation | ||
Consideration: | ||
Cash | $ 381 | |
Fair value of Chesapeake’s common stock issued in the Merger (a) | 2,037 | |
Total consideration | 2,418 | |
Fair Value of Liabilities Assumed: | ||
Current liabilities | 166 | |
Long-term debt | 1,379 | |
Deferred tax liabilities | 314 | $ 314 |
Other long-term liabilities | 36 | |
Amounts attributable to liabilities assumed | 1,895 | |
Fair Value of Assets Acquired: | ||
Cash and cash equivalents | 28 | |
Other current assets | 128 | |
Proved oil and natural gas properties | 3,264 | |
Unproved properties | 756 | |
Other property and equipment | 77 | |
Other long-term assets | 60 | |
Amounts attributable to assets acquired | 4,313 | |
Total identifiable net assets | $ 2,418 |
Oil and Natural Gas Property _5
Oil and Natural Gas Property Transactions - Pro Forma Financial Information (Details) - Wildhorse Resource Development Corporation - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | |||
Revenues | $ 2,607 | $ 6,661 | $ 7,692 |
Net income (loss) available to common stockholders | $ (199) | $ (85) | $ (543) |
Earnings per common share, basic (in dollars per share) | $ (0.12) | $ (0.05) | $ (0.33) |
Earnings per common share, diluted (in dollars per share) | $ (0.12) | $ (0.05) | $ (0.33) |
Capitalized Exploratory Well _3
Capitalized Exploratory Well Costs (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Changes in Capitalized Well Costs | |
Beginning balance | $ 36 |
Additions pending the determination of proved reserves | 14 |
Divestitures and other | 0 |
Reclassifications to proved properties | (18) |
Charges to exploration expense | (8) |
Ending balance | 24 |
Capitalized exploratory well costs that have been capitalized for period greater than one year | $ 1 |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities Excluded from Computation of EPS Table (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Common stock equivalent of our preferred stock outstanding prior to exchange | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares of common stock that were excluded from the calculation of diluted EPS (in shares) | 1 | 0 | 1 | 0 |
Common stock equivalent of our convertible senior notes outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares of common stock that were excluded from the calculation of diluted EPS (in shares) | 124 | 146 | 124 | 146 |
Participating securities | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares of common stock that were excluded from the calculation of diluted EPS (in shares) | 0 | 2 | 0 | 1 |
Common stock equivalent of our preferred stock outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares of common stock that were excluded from the calculation of diluted EPS (in shares) | 58 | 60 | 58 | 60 |
Debt - Long-Term Debt Table (De
Debt - Long-Term Debt Table (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Feb. 01, 2019 | Dec. 31, 2018 |
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 9,732 | $ 8,168 | |
Carrying amount | 9,341 | 7,722 | |
Debt issuance costs | (46) | (53) | |
Debt, current | (208) | (381) | |
Current maturities of long-term debt, net | (208) | (381) | |
Long-term debt, fair value | 9,524 | 7,787 | |
Long-term debt, net | 9,133 | 7,341 | |
Interest rate derivatives | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | 0 | 0 | |
Interest rate derivatives | 1 | 1 | |
Senior notes | Floating rate senior notes due 2019 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | 0 | 380 | |
Carrying amount | 0 | 380 | |
Senior notes | 6.625% senior notes due 2020 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | 208 | 437 | |
Carrying amount | $ 208 | 437 | |
Interest rate, stated percentage | 6.625% | ||
Senior notes | 6.875% senior notes due 2020 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 93 | 227 | |
Carrying amount | $ 93 | 227 | |
Interest rate, stated percentage | 6.875% | ||
Senior notes | 6.125% senior notes due 2021 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 167 | 548 | |
Carrying amount | $ 167 | 548 | |
Interest rate, stated percentage | 6.125% | ||
Senior notes | 5.375% senior notes due 2021 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 127 | 267 | |
Carrying amount | $ 127 | 267 | |
Interest rate, stated percentage | 5.375% | ||
Senior notes | 4.875% senior notes due 2022 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 338 | 451 | |
Carrying amount | $ 338 | 451 | |
Interest rate, stated percentage | 4.875% | ||
Senior notes | 5.75% senior notes due 2023 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 209 | 338 | |
Carrying amount | $ 209 | 338 | |
Interest rate, stated percentage | 5.75% | ||
Senior notes | 7.00% senior notes due 2024 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 850 | 850 | |
Carrying amount | $ 850 | 850 | |
Interest rate, stated percentage | 7.00% | ||
Senior notes | 6.875% senior notes due 2025 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 618 | 0 | |
Carrying amount | $ 621 | 0 | |
Chesapeake revolving credit facility | $ 700 | ||
Interest rate, stated percentage | 6.875% | 6.875% | |
Senior notes | 8.00% senior notes due 2025 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 1,245 | 1,300 | |
Carrying amount | $ 1,237 | 1,291 | |
Interest rate, stated percentage | 8.00% | ||
Senior notes | 7.5% senior notes due 2026 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 400 | 400 | |
Carrying amount | 400 | 400 | |
Senior notes | 8.00% senior notes due 2026 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | 919 | 0 | |
Carrying amount | 885 | 0 | |
Chesapeake revolving credit facility | $ 919 | ||
Interest rate, stated percentage | 8.00% | ||
Senior notes | 8.00% senior notes due 2027 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 1,090 | 1,300 | |
Carrying amount | $ 1,089 | 1,299 | |
Interest rate, stated percentage | 8.00% | ||
Convertible debt | 5.5% convertible senior notes due 2026 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 1,064 | 1,250 | |
Carrying amount | $ 758 | 866 | |
Interest rate, stated percentage | 5.50% | ||
Interest rate, effective percentage | 11.50% | ||
Convertible debt | 7.5% senior notes due 2026 | |||
Long-Term Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 7.50% | ||
Convertible debt | 8.00% senior notes due 2026 | |||
Long-Term Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 8.00% | ||
Convertible debt | 2.25% contingent convertible senior notes due 2038 | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | $ 0 | 1 | |
Carrying amount | $ 0 | 1 | |
Interest rate, stated percentage | 2.25% | ||
Line of credit | Chesapeake revolving credit facility | Revolving credit facility | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | 419 | ||
Chesapeake revolving credit facility | $ 1,504 | 419 | |
Line of credit | BVL revolving credit facility | Revolving credit facility | |||
Long-Term Debt Instrument [Line Items] | |||
Principal amount | 900 | 0 | |
Chesapeake revolving credit facility | $ 900 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Feb. 01, 2019USD ($) | Sep. 30, 2019USD ($)shares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018USD ($) |
Long-Term Debt Instrument [Line Items] | |||||||||
Gain (loss) on purchases or exchanges of debt | $ 70,000,000 | $ (68,000,000) | |||||||
Chesapeake senior notes | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Gain (loss) on purchases or exchanges of debt | $ 64,000,000 | ||||||||
Senior notes | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Debt redemption, percent of principal amount of notes to be redeemed | 100.00% | ||||||||
Debt redemption, percent of aggregate amount of notes to be redeemed | 35.00% | ||||||||
Repayments of senior debt | 380,000,000 | ||||||||
Senior notes | Chesapeake senior notes | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Debt instrument, principal amount | $ 507,000,000 | $ 507,000,000 | |||||||
Conversation of common stock shares outstanding (in shares) | shares | 235,563,519 | ||||||||
Senior notes | 8.00% senior notes due 2026 | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Debt instrument, principal amount | $ 919,000,000 | $ 919,000,000 | |||||||
Interest rate, stated percentage | 8.00% | 8.00% | |||||||
Senior notes | 6.875% senior notes due 2025 | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Debt instrument, principal amount | $ 700,000,000 | ||||||||
Gain (loss) on purchases or exchanges of debt | $ 6,000,000 | ||||||||
Interest rate, stated percentage | 6.875% | 6.875% | 6.875% | ||||||
Debt covenant, basket | $ 25,000,000 | ||||||||
Debt repurchased, principal | $ 82,000,000 | $ 82,000,000 | |||||||
Repayment of senior notes | 76,000,000 | ||||||||
Convertible senior notes | Chesapeake senior notes | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Debt instrument, principal amount | $ 186,000,000 | $ 186,000,000 | |||||||
Conversation of common stock shares outstanding (in shares) | shares | 73,389,094 | ||||||||
Convertible senior notes | 8.00% senior notes due 2026 | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 8.00% | 8.00% | |||||||
Revolving credit facility | Chesapeake revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 3,000,000,000 | $ 3,000,000,000 | |||||||
Line of credit facility, maximum borrowing capacity, increased maximum | 4,000,000,000 | 4,000,000,000 | |||||||
Letters of credit outstanding, amount | $ 53,000,000 | $ 53,000,000 | |||||||
Leverage ratio | 4 | 5.50 | 5.50 | ||||||
Leverage ratio, decrease by quarter | 0.0025 | 0.0025 | |||||||
Line of credit facility, current borrowing capacity | $ 1,443,000,000 | $ 1,443,000,000 | |||||||
Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | 2,000,000,000 | 2,000,000,000 | |||||||
Line of credit facility, current borrowing capacity | $ 1,300,000,000 | $ 1,300,000,000 | |||||||
Mortgage guarantee, secured percent on proved reserves | 85.00% | 85.00% | |||||||
Ratio of net debt to EBITDAX | 4 | ||||||||
Ratio of funded debt to EBITDAX | 4 | ||||||||
Current ratio | 1 | ||||||||
Revolving credit facility | Line of credit | Chesapeake revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Debt instrument, principal amount | $ 1,504,000,000 | $ 1,504,000,000 | $ 419,000,000 | ||||||
Revolving credit facility | Line of credit | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Debt instrument, principal amount | $ 900,000,000 | $ 900,000,000 | $ 0 | ||||||
Minimum | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Commitment fee | 0.375% | ||||||||
Minimum | Alternative Base Rate (ABR) | Revolving credit facility | Chesapeake revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 0.50% | ||||||||
Minimum | Alternative Base Rate (ABR) | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 0.50% | ||||||||
Minimum | Eurodollar | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 1.50% | ||||||||
Minimum | London Interbank Offered Rate (LIBOR) | Revolving credit facility | Chesapeake revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 1.50% | ||||||||
Minimum | London Interbank Offered Rate (LIBOR) | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 1.50% | ||||||||
Maximum | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Commitment fee | 0.50% | ||||||||
Maximum | Alternative Base Rate (ABR) | Revolving credit facility | Chesapeake revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 2.00% | ||||||||
Maximum | Alternative Base Rate (ABR) | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 1.50% | ||||||||
Maximum | Eurodollar | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 2.50% | ||||||||
Maximum | London Interbank Offered Rate (LIBOR) | Revolving credit facility | Chesapeake revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 3.00% | ||||||||
Maximum | London Interbank Offered Rate (LIBOR) | Revolving credit facility | BVL revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Variable rate percentage | 2.50% | ||||||||
Forecast | Revolving credit facility | Chesapeake revolving credit facility | |||||||||
Long-Term Debt Instrument [Line Items] | |||||||||
Leverage ratio | 4 | ||||||||
Secured leverage ratio | 2.50 | ||||||||
Fixed charge coverage ratio | 2.50 | 2.25 | 2 |
Debt - Conversion (Details)
Debt - Conversion (Details) - Senior notes $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Debt Conversion [Line Items] | |
Amount of notes exchanged | $ 884 |
6.625% senior notes due 2020 | |
Debt Conversion [Line Items] | |
Amount of notes exchanged | 229 |
6.875% senior notes due 2020 | |
Debt Conversion [Line Items] | |
Amount of notes exchanged | 134 |
6.125% senior notes due 2021 | |
Debt Conversion [Line Items] | |
Amount of notes exchanged | 381 |
5.375% senior notes due 2021 | |
Debt Conversion [Line Items] | |
Amount of notes exchanged | $ 140 |
- Fair Value of Debt Table (Det
- Fair Value of Debt Table (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 9,524 | $ 7,787 |
Quoted Prices in Active Markets (Level 1) | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt, fair value | 208 | 381 |
Long-term debt, fair value | 2,790 | 3,495 |
Quoted Prices in Active Markets (Level 1) | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt, fair value | 208 | 379 |
Long-term debt, fair value | 2,245 | 3,173 |
Significant Other Observable Inputs (Level 2) | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 6,343 | 3,846 |
Significant Other Observable Inputs (Level 2) | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 4,980 | $ 3,644 |
Contingencies and Commitments -
Contingencies and Commitments - Narrative (Details) - USD ($) | Aug. 28, 2019 | Jan. 05, 2014 | Feb. 28, 2019 | Aug. 09, 2018 |
Commonwealth of Pennsylvania, royalty underpayment | Settled litigation | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | $ 35,000,000 | |||
Pennsylvania Department of Environmental Protection | Settled litigation | Chesapeake Appalachia, L.L.C. | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | $ 100,000 | |||
Chaparral Energy, Inc. | Healthcare of Ontario Pension Plan (HOOPP) | Pending litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages sought, value | $ 215,000,000 | |||
FTS International, Inc. | Putative class action lawsuit | Pending litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages sought, value | $ 1,000,000 |
Contingencies and Commitments_2
Contingencies and Commitments - Gathering Processing and Transportation Commitments Table (Details) - Gathering, processing and transportation agreement $ in Millions | Sep. 30, 2019USD ($) |
Other Commitments [Line Items] | |
Remainder of 2019 | $ 201 |
2020 | 764 |
2021 | 673 |
2022 | 570 |
2023 | 480 |
2024 – 2035 | 2,731 |
Total | $ 5,419 |
Other Liabilities - Current Tab
Other Liabilities - Current Table (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Revenues and royalties due others | $ 429 | $ 687 |
Accrued drilling and production costs | 474 | 258 |
Joint interest prepayments received | 49 | 73 |
VPP deferred revenue | 56 | 59 |
Accrued compensation and benefits | 156 | 202 |
Other accrued taxes | 141 | 108 |
Other | 185 | 212 |
Total other current liabilities | $ 1,490 | $ 1,599 |
Other Liabilities - Long-Term T
Other Liabilities - Long-Term Table (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
VPP deferred revenue | $ 22 | $ 63 |
Unrecognized tax benefits | 55 | 53 |
Other | 109 | 103 |
Total other long-term liabilities | $ 186 | $ 219 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Feb. 01, 2019USD ($)contract | Sep. 30, 2019USD ($) | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | |||
Operating lease liability | $ 25 | ||
Operating lease, right-of-use asset | $ 22 | ||
Natural Gas Compressors | Midcon Compression, L.L.C. | |||
Lessee, Lease, Description [Line Items] | |||
Lease terms | 38 months | ||
Wildhorse Resource Development Corporation | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease liability | $ 40 | ||
Operating lease, right-of-use asset | 38 | ||
Lease incentive | $ 2 | ||
Number of leases | contract | 2 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease, remaining lease term | 1 month | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease, remaining lease term | 7 years 3 months 18 days |
Leases - ROU Assets and Liabili
Leases - ROU Assets and Liabilities (Details) $ in Millions | Sep. 30, 2019USD ($) |
Assets and Liabilities, Lessee [Abstract] | |
Financing, ROU assets | $ 20 |
Financing, current lease liabilities | 9 |
Financing, long-term lease liabilities | 11 |
Financing, present value of lease liabilities | 20 |
Operating, ROU assets | 22 |
Operating, current lease liabilities | 9 |
Operating, long-term lease liabilities | 16 |
Operating, present value of lease liabilities | $ 25 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Lease cost: | ||
Amortization of ROU assets | $ 2 | $ 6 |
Interest on lease liability | 0 | 1 |
Finance lease cost | 2 | 7 |
Operating lease cost | 7 | 24 |
Short-term lease cost | 34 | 82 |
Total lease cost | 43 | 113 |
Other information: | ||
Operating cash outflows from finance lease | 0 | 1 |
Operating cash outflows from operating leases | 3 | 8 |
Investing cash outflows from operating leases | 38 | 98 |
Financing cash outflows from finance lease | $ 2 | $ 6 |
Weighted-average remaining lease term - finance lease | 2 years 3 months | 2 years 3 months |
Weighted-average remaining lease term - operating leases | 4 years 10 months 13 days | 4 years 10 months 13 days |
Weighted-average discount rate - finance lease | 7.50% | 7.50% |
Weighted-average discount rate - operating leases | 4.17% | 4.17% |
Capitalized lease costs | $ 38 | $ 98 |
Leases - Maturity Analysis of F
Leases - Maturity Analysis of Finance and Operating Lease Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Finance Leases, After Adoption of 842: | ||
Remainder of 2019 | $ 3 | |
2020 | 10 | |
2021 | 10 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total lease payments | 23 | |
Less imputed interest | (3) | |
Financing, present value of lease liabilities | 20 | |
Less current maturities | (9) | |
Present value of lease liabilities, less current maturities | 11 | |
Operating Leases, After Adoption of 842: | ||
Remainder of 2019 | 2 | |
2020 | 9 | |
2021 | 5 | |
2022 | 3 | |
2023 | 2 | |
Thereafter | 7 | |
Total lease payments | 28 | |
Less imputed interest | (3) | |
Operating, present value of lease liabilities | 25 | |
Less current maturities | (9) | |
Present value of lease liabilities, less current maturities | $ 16 | |
Capital Leases, Before Adoption of 842: | ||
2019 | $ 10 | |
2020 | 10 | |
2021 | 10 | |
Total minimum lease payments | 30 | |
Operating Leases, After Adoption of 842: | ||
2019 | 3 | |
2020 | 1 | |
2021 | 0 | |
Total minimum lease payments | $ 4 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - Retained Earnings - USD ($) $ in Millions | Jan. 01, 2019 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Cumulative effect of accounting change | $ 0 | $ (8) | [1] |
ASU 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Cumulative effect of accounting change | $ (8) | ||
[1] | Financial information for prior periods has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 1,003 | $ 1,331 | $ 3,412 | $ 3,924 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 167 | (132) | 141 | (500) | ||
Revenues | 2,087 | 2,424 | [1] | 6,669 | 7,237 | [1] |
Oil, natural gas and NGL revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 1,170 | 1,199 | [1] | 3,553 | 3,424 | [1] |
Marketing | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 805 | 1,030 | 2,773 | 3,182 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 0 | (3) | ||||
Revenues | 889 | 1,219 | [1] | 3,038 | 3,738 | [1] |
Other marketing revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 84 | 189 | 268 | 556 | ||
Marcellus | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 158 | 184 | 656 | 646 | ||
Haynesville | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 129 | 195 | 494 | 605 | ||
Eagle Ford | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 336 | 493 | 1,168 | 1,411 | ||
Brazos Valley | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 209 | 548 | ||||
Powder River Basin | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 118 | 108 | 355 | 243 | ||
Mid-Continent | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 53 | 85 | 191 | 301 | ||
Utica | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 266 | 718 | ||||
Oil | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 613 | 594 | 1,879 | 1,698 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 124 | (100) | (49) | (388) | ||
Oil | Oil, natural gas and NGL revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 737 | 494 | 1,830 | 1,310 | ||
Oil | Marketing | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 603 | 707 | 1,830 | 2,125 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 0 | 0 | ||||
Revenues | 683 | 826 | 2,060 | 2,506 | ||
Oil | Other marketing revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 80 | 119 | 230 | 381 | ||
Oil | Marcellus | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Oil | Haynesville | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 0 | 0 | 0 | 2 | ||
Oil | Eagle Ford | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 282 | 399 | 962 | 1,148 | ||
Oil | Brazos Valley | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 194 | 513 | ||||
Oil | Powder River Basin | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 97 | 78 | 273 | 173 | ||
Oil | Mid-Continent | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 40 | 58 | 131 | 196 | ||
Oil | Utica | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 59 | 179 | ||||
Natural Gas | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 353 | 578 | 1,383 | 1,822 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 43 | (18) | 190 | (85) | ||
Natural Gas | Oil, natural gas and NGL revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 396 | 560 | 1,573 | 1,737 | ||
Natural Gas | Marketing | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 165 | 211 | 741 | 733 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 0 | (3) | ||||
Revenues | 169 | 281 | 776 | 908 | ||
Natural Gas | Other marketing revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 4 | 70 | 38 | 175 | ||
Natural Gas | Marcellus | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 158 | 184 | 656 | 646 | ||
Natural Gas | Haynesville | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 129 | 195 | 494 | 603 | ||
Natural Gas | Eagle Ford | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 32 | 36 | 117 | 120 | ||
Natural Gas | Brazos Valley | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 10 | 23 | ||||
Natural Gas | Powder River Basin | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 16 | 17 | 59 | 40 | ||
Natural Gas | Mid-Continent | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 8 | 15 | 34 | 63 | ||
Natural Gas | Utica | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 131 | 350 | ||||
NGL | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 37 | 159 | 150 | 404 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 0 | (14) | 0 | (27) | ||
NGL | Oil, natural gas and NGL revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 37 | 145 | 150 | 377 | ||
NGL | Marketing | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 37 | 112 | 202 | 324 | ||
Gains (losses) on oil, natural gas and NGL derivatives | 0 | 0 | ||||
Revenues | 37 | 112 | 202 | 324 | ||
NGL | Other marketing revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
NGL | Marcellus | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
NGL | Haynesville | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
NGL | Eagle Ford | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 22 | 58 | 89 | 143 | ||
NGL | Brazos Valley | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 5 | 12 | ||||
NGL | Powder River Basin | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 5 | 13 | 23 | 30 | ||
NGL | Mid-Continent | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 5 | 12 | $ 26 | 42 | ||
NGL | Utica | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 76 | $ 189 | ||||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts | $ (21) | $ (17) |
Total accounts receivable, net | 977 | 1,247 |
Oil, natural gas and NGL sales | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, gross | 644 | 976 |
Joint interest | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, gross | 290 | 211 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, gross | $ 64 | $ 77 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | [1] | Sep. 30, 2019 | Sep. 30, 2018 | [1] | Feb. 01, 2019 | |
Business Acquisition [Line Items] | ||||||||
Effective income tax rate | 0.00% | |||||||
Income tax benefit | $ 1,000,000 | $ (1,000,000) | $ 315,000,000 | $ 8,000,000 | ||||
Ownership change, cumulative shift | 40.00% | |||||||
Wildhorse Resource Development Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Deferred tax liabilities | $ 314,000,000 | $ 314,000,000 | ||||||
Income tax benefit | 1,000,000 | 314,000,000 | $ 315,000,000 | |||||
Deferred tax liability, plant, property and equipment and prepaid compensation | 401,000,000 | |||||||
Deferred tax assets, operating loss carryforward, limitations | $ 61,000,000 | 61,000,000 | ||||||
Wildhorse Resource Development Corporation | Federal | ||||||||
Business Acquisition [Line Items] | ||||||||
Deferred tax asset, operating loss carryforward | $ 87,000,000 | |||||||
Wildhorse Resource Development Corporation | State | ||||||||
Business Acquisition [Line Items] | ||||||||
Income tax benefit | $ 314,000,000 | |||||||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Equity - Common Stock (Details)
Equity - Common Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock, shares issued, beginning balance (shares) | 1,634,486,000 | 913,271,000 | 913,715,512 | 908,733,000 | ||
Restricted stock issuances (net of forfeitures and cancellations) | 344,000 | 421,000 | 3,738,000 | 4,959,000 | ||
Common stock, shares issued, ending balance (shares) | 1,954,150,951 | 913,692,000 | 1,954,150,951 | 913,692,000 | ||
Loss on exchange of preferred stock | $ 17,000 | $ 0 | [1] | $ 17,000 | $ 0 | [1] |
Wildhorse Resource Development Corporation | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for WildHorse Merger | 0 | 0 | 717,376 | 0 | ||
COMMON STOCK | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for WildHorse Merger | $ 0 | $ 0 | [2] | $ 7,000 | $ 0 | [2] |
COMMON STOCK | Exchange of convertible notes for shares of common stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued, exchanged (in shares) | 73,389,000 | 0 | 73,389,000 | 0 | ||
COMMON STOCK | Exchange of senior notes for shares of common stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued, exchanged (in shares) | 235,564,000 | 0 | 235,564,000 | 0 | ||
COMMON STOCK | Exchange of preferred stock for shares of common stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued, exchanged (in shares) | 10,367,950 | 0 | 10,368,000 | 0 | ||
PREFERRED STOCK | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued, exchanged (in shares) | 40,000 | 0 | 40,000 | 0 | ||
PREFERRED STOCK | 5.75% Series A Cumulative Convertible Preferred Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued, exchanged (in shares) | 40,000 | |||||
Interest rate, stated percentage | 5.75% | 5.75% | ||||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||
[2] | Financial information for prior periods has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Equity - Preferred Stock (Detai
Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred stock, shares outstanding, beginning balance (shares) | 5,603,458 | |||||
Preferred stock, shares outstanding, ending balance (shares) | 5,563,458 | 5,563,458 | ||||
5.75% | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred stock, shares outstanding, beginning balance (shares) | 770,000 | 770,000 | 770,000 | 770,000 | ||
Preferred stock, shares outstanding, ending balance (shares) | 770,000 | 770,000 | 770,000 | 770,000 | ||
Liquidation price per share (in dollars per share) | $ 1,000 | $ 1,000 | ||||
5.75% (A) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred stock, shares outstanding, beginning balance (shares) | 463,000 | 463,000 | 463,000 | 463,000 | ||
Preferred stock, shares outstanding, ending balance (shares) | 423,000 | 463,000 | 423,000 | 463,000 | ||
Liquidation price per share (in dollars per share) | $ 1,000 | $ 1,000 | ||||
4.50% | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred stock, shares outstanding, beginning balance (shares) | 2,559,000 | 2,559,000 | 2,559,000 | 2,559,000 | ||
Preferred stock, shares outstanding, ending balance (shares) | 2,559,000 | 2,559,000 | 2,559,000 | 2,559,000 | ||
Liquidation price per share (in dollars per share) | $ 100 | $ 100 | ||||
5.00% (2005B) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred stock, shares outstanding, beginning balance (shares) | 1,811,000 | 1,811,000 | 1,811,000 | 1,811,000 | ||
Preferred stock, shares outstanding, ending balance (shares) | 1,811,000 | 1,811,000 | 1,811,000 | 1,811,000 | ||
Liquidation price per share (in dollars per share) | $ 100 | $ 100 | ||||
PREFERRED STOCK | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exchange of preferred stock | $ (40,000) | $ 0 | [1] | $ (40,000) | $ 0 | [1] |
PREFERRED STOCK | 5.75% | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exchange of preferred stock | 0 | 0 | ||||
PREFERRED STOCK | 5.75% (A) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exchange of preferred stock | $ (40) | $ (40) | ||||
Interest rate, stated percentage | 5.75% | 5.75% | ||||
PREFERRED STOCK | 4.50% | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exchange of preferred stock | $ 0 | $ 0 | ||||
PREFERRED STOCK | 5.00% (2005B) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exchange of preferred stock | $ 0 | $ 0 | ||||
[1] | Financial information for prior periods has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock (Details) - Participating securities shares in Thousands | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Shares of Unvested Restricted Stock | |
Unvested restricted stock, beginning balance (in shares) | shares | 11,858 |
Granted (in shares) | shares | 5,370 |
Vested (in shares) | shares | (5,439) |
Forfeited (in shares) | shares | (1,241) |
Unvested restricted stock, ending balance (in shares) | shares | 10,548 |
Weighted Average Grant Date Fair Value Per Share | |
Unvested restricted stock, beginning balance (in dollars per share) | $ / shares | $ 4.43 |
Granted (in dollars per share) | $ / shares | 2.85 |
Vested (in dollars per share) | $ / shares | 4.46 |
Forfeited (in dollars per share) | $ / shares | 3.75 |
Unvested restricted stock, ending balance (in dollars per share) | $ / shares | $ 3.69 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Participating securities | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Intrinsic value of restricted stock, vested | $ 15 | |
Unrecognized compensation expense | $ 24 | |
Share-based compensation expense, weighted average period for recognition | 1 year 11 months 1 day | |
Stock option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense, weighted average period for recognition | 1 year 3 months 3 days | |
Unrecognized compensation expense | $ 7 | |
Stock option | Management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting period | 3 years | |
Stock option | Management | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 7 years | |
Stock option | Management | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 10 years | |
Performance Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting period | 3 years | |
Performance Share Units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance share units maximum payout percentage | 0.00% | |
Performance Share Units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance share units maximum payout percentage | 200.00% | |
Performance Share Units | Management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting period | 3 years | |
Performance share units maximum payout percentage | 200.00% | |
Performance share grant maximum payout percentage | 100.00% | |
Terms of award | less than zero | |
Performance Share Units | Management | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
TSR component percentage performance share units | 0.00% | |
Operational component percentage performance share ufnits | 0.00% | |
Performance Share Units | Management | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
TSR component percentage performance share units | 100.00% | |
Operational component percentage performance share ufnits | 100.00% | |
Cash Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting period | 3 years |
Share-Based Compensation - Equi
Share-Based Compensation - Equity-Classified Valuation Table (Details) - Stock option | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected option life – years | 6 years |
Volatility | 65.61% |
Risk-free interest rate | 2.47% |
Dividend yield | 0.00% |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning balance (in shares options) | 18,096 | |
Granted (in shares options) | 1,000 | |
Exercised (in shares options) | 0 | |
Expired (in shares options) | (487) | |
Forfeited (in shares options) | (589) | |
Outstanding, ending balance (in shares options) | 18,020 | 18,096 |
Weighted Average Exercise Price Per Share | ||
Outstanding, beginning (in dollars per share) | $ 7.20 | |
Granted (in dollars per share) | 2.97 | |
Exercised (in dollars per share) | 0 | |
Expired (in dollars per share) | 6.49 | |
Forfeited (in dollars per share) | 3.92 | |
Outstanding, ending (in dollars per share) | $ 7.09 | $ 7.20 |
Weighted average contract life, outstanding | 6 years 1 month 13 days | 7 years 1 month 24 days |
Aggregate intrinsic value, outstanding | $ 0 | $ 0 |
Aggregate intrinsic value, exercised | $ 0 | |
Exercisable (in shares options) | 12,999 | |
Weighted average exercise price, exercisable (in dollars per share) | $ 8.30 | |
Weighted average contract life, exercisable (in years) | 5 years 3 months 21 days | |
Aggregate intrinsic value, exercisable | $ 0 |
Share-Based Compensation - Eq_2
Share-Based Compensation - Equity-Classified Compensation Table (Details) - Restricted stock and stock options - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 8 | $ 8 | $ 26 | $ 30 |
General and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 6 | 7 | 21 | 24 |
Oil and natural gas properties | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1 | 0 | 2 | 2 |
Oil, natural gas and NGL production expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1 | 1 | 3 | 4 |
Exploration expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 |
Share-Based Compensation - Liab
Share-Based Compensation - Liability Classified Valuation Table (Details) - 2017 Awards - Performance Share Units | 9 Months Ended |
Sep. 30, 2019 | |
Grant Date Assumptions | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility | 80.65% |
Risk-free interest rate | 1.54% |
Dividend yield for value of awards | 0.00% |
Reporting Period Assumptions | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility | 95.41% |
Risk-free interest rate | 1.87% |
Dividend yield for value of awards | 0.00% |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Share Unit Breakout (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Performance Share Units | Award Year 2019, Payable 2020, 2021 and 2022 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units | 4,785,372 | |
Fair Value | $ 7 | $ 14 |
Vested Liability | $ 0 | |
Performance Share Units | Award Year 2018, Payable 2020 and 2021 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units | 2,388,185 | |
Fair Value | $ 3 | 7 |
Vested Liability | $ 0 | |
Performance Share Units | Award Year 2017, Payable 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units | 1,174,973 | |
Fair Value | $ 1 | 8 |
Vested Liability | $ 1 | |
Cash Restricted Stock Units | Award Year 2018, Payable 2020 and 2021 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units | 9,267,227 | |
Fair Value | $ 13 | $ 28 |
Vested Liability | $ 0 |
Share-Based Compensation - Li_2
Share-Based Compensation - Liability-Classified Compensation Table (Details) - Performance Share Units - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0 | $ 1 | $ 12 | $ 26 |
General and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | (1) | (1) | 7 | 20 |
Oil and natural gas properties | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1 | 1 | 2 | 2 |
Oil, natural gas and NGL production expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 0 | 1 | 3 | 3 |
Exploration expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0 | $ 0 | $ 0 | $ 1 |
Derivative and Hedging Activi_3
Derivative and Hedging Activities - Derivative Instruments (Details) MMBbls in Millions, $ in Millions, Bcf in Trillions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)BcfMMBbls | Dec. 31, 2018USD ($)BcfMMBbls | |
Derivative [Line Items] | ||
Derivative assets (liabilities), at fair value, net | $ 323 | $ 282 |
Energy related derivative | ||
Derivative [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 323 | 282 |
Energy related derivative | Future Natural Gas Prices | Utica Shale | ||
Derivative [Line Items] | ||
Derivative assets (liabilities), at fair value, net | $ 0 | $ 7 |
Energy related derivative | Oil | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | MMBbls | 30 | 27 |
Derivative assets (liabilities), at fair value, net | $ 186 | $ 260 |
Energy related derivative | Natural Gas | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | Bcf | 625 | 966 |
Derivative assets (liabilities), at fair value, net | $ 137 | $ 15 |
Energy related derivative | Fixed-price swaps | Oil | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | MMBbls | 22 | 12 |
Derivative assets (liabilities), at fair value, net | $ 152 | $ 157 |
Energy related derivative | Fixed-price swaps | Natural Gas | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | Bcf | 383 | 623 |
Derivative assets (liabilities), at fair value, net | $ 139 | $ 26 |
Energy related derivative | Three-way collars | Natural Gas | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | Bcf | 15 | 88 |
Derivative assets (liabilities), at fair value, net | $ 3 | $ 1 |
Energy related derivative | Collars | Oil | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | MMBbls | 3 | 8 |
Derivative assets (liabilities), at fair value, net | $ 33 | $ 98 |
Energy related derivative | Collars | Natural Gas | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | Bcf | 9 | 55 |
Derivative assets (liabilities), at fair value, net | $ 3 | $ (3) |
Energy related derivative | Call options | Natural Gas | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | Bcf | 28 | 44 |
Derivative assets (liabilities), at fair value, net | $ 0 | $ 0 |
Energy related derivative | Call swaptions | Oil | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | MMBbls | 2 | |
Derivative assets (liabilities), at fair value, net | $ (1) | |
Energy related derivative | Call swaptions | Natural Gas | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | Bcf | 136 | 106 |
Derivative assets (liabilities), at fair value, net | $ (7) | $ (9) |
Energy related derivative | Put options | Oil | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | MMBbls | 1 | |
Derivative assets (liabilities), at fair value, net | $ (2) | |
Energy related derivative | Basis protection swaps | Oil | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | MMBbls | 2 | 7 |
Derivative assets (liabilities), at fair value, net | $ 4 | $ 5 |
Energy related derivative | Basis protection swaps | Natural Gas | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume | Bcf | 54 | 50 |
Derivative assets (liabilities), at fair value, net | $ (1) | $ 0 |
Derivative and Hedging Activi_4
Derivative and Hedging Activities - Derivative Instruments in Balance Sheet Table (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets (liabilities), at fair value, net | $ 323 | $ 282 |
Commodity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 347 | 422 |
Derivative liability | (24) | (147) |
Energy related derivative | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 323 | 282 |
Not designated as hedging instrument | Commodity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset (liability), fair value, gross asset (liability) | 323 | 282 |
Derivative asset (liability) fair value, net asset (liability), netted | 0 | 0 |
Derivative assets (liabilities), at fair value, net | 323 | 282 |
Short-term derivative asset | Not designated as hedging instrument | Commodity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 294 | 306 |
Derivative asset, fair value, gross liability, netted | (22) | (104) |
Derivative asset | 272 | 202 |
Long-term derivative asset | Not designated as hedging instrument | Commodity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 55 | 117 |
Derivative asset, fair value, gross liability, netted | (4) | (41) |
Derivative asset | 51 | 76 |
Short-term derivative liability | Not designated as hedging instrument | Commodity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value, gross liability | (22) | (107) |
Derivative liability, fair value, gross asset, netted | 22 | 104 |
Derivative liability | 0 | (3) |
Long-term derivative liability | Not designated as hedging instrument | Commodity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value, gross liability | (4) | (41) |
Derivative liability, fair value, gross asset, netted | 4 | 41 |
Derivative liability | 0 | 0 |
Future Natural Gas Prices | Short-term derivative asset | Not designated as hedging instrument | Energy related derivative | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 7 |
Derivative asset, fair value, gross liability, netted | 0 | 0 |
Derivative asset | $ 0 | $ 7 |
Derivative and Hedging Activi_5
Derivative and Hedging Activities - Oil, Natural Gas and NGL Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Derivative [Line Items] | ||||||
Gains (losses) on undesignated oil, natural gas and NGL derivatives | $ 167 | $ (132) | $ 141 | $ (500) | ||
Revenues | 2,087 | 2,424 | [1] | 6,669 | 7,237 | [1] |
Oil, natural gas and NGL sales | ||||||
Derivative [Line Items] | ||||||
Losses on terminated cash flow hedges | (8) | (8) | (26) | (25) | ||
Oil, natural gas and NGL sales | Commodity contract | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Gains (losses) on undesignated oil, natural gas and NGL derivatives | 175 | (124) | 167 | (475) | ||
Oil, natural gas and NGL | ||||||
Derivative [Line Items] | ||||||
Oil, natural gas and NGL revenues | 1,003 | 1,331 | 3,412 | 3,924 | ||
Revenues | $ 1,170 | $ 1,199 | [1] | $ 3,553 | $ 3,424 | [1] |
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Derivative and Hedging Activi_6
Derivative and Hedging Activities - Marketing Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Derivative [Line Items] | ||||||
Revenues | $ 1,003 | $ 1,331 | $ 3,412 | $ 3,924 | ||
Losses on undesignated marketing natural gas derivatives | 167 | (132) | 141 | (500) | ||
Revenues | 2,087 | 2,424 | [1] | 6,669 | 7,237 | [1] |
Marketing, Gathering And Compression | Other contract | ||||||
Derivative [Line Items] | ||||||
Losses on undesignated marketing natural gas derivatives | 0 | 0 | (4) | 0 | ||
Marketing | Marketing, Gathering And Compression | ||||||
Derivative [Line Items] | ||||||
Revenues | 889 | 1,219 | 3,042 | 3,738 | ||
Marketing | ||||||
Derivative [Line Items] | ||||||
Revenues | 805 | 1,030 | 2,773 | 3,182 | ||
Losses on undesignated marketing natural gas derivatives | 0 | (3) | ||||
Revenues | $ 889 | $ 1,219 | [1] | $ 3,038 | $ 3,738 | [1] |
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Derivative and Hedging Activi_7
Derivative and Hedging Activities - Cash Flow Hedges Components of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
AOCI, after tax, beginning of period | $ (23) | ||||
Losses reclassified to income, after tax | [1] | $ 8 | 26 | ||
Losses reclassified to income, after tax | [1],[2] | $ 8 | $ 25 | ||
AOCI, after tax, end of period | 3 | 3 | |||
Cash flow hedging | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
AOCI, before tax, beginning of period | (62) | (97) | (80) | (114) | |
AOCI, after tax, beginning of period | (5) | (40) | (23) | (57) | |
Losses reclassified to income, before tax | 8 | 26 | |||
Losses reclassified to income, after tax | 8 | 26 | |||
Losses reclassified to income, before tax | 8 | 25 | |||
Losses reclassified to income, after tax | 8 | 25 | |||
AOCI, before tax, end of period | (54) | (89) | (54) | (89) | |
AOCI, after tax, end of period | $ 3 | $ (32) | $ 3 | $ (32) | |
[1] | Deferred tax activity incurred in other comprehensive income was offset by a valuation allowance. | ||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Derivative and Hedging Activi_8
Derivative and Hedging Activities - Fair Value of Recurring Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative assets (liabilities), at fair value, net | $ 323 | $ 282 | ||
Commodity contract | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 347 | 422 | ||
Derivative liability | 24 | 147 | ||
Energy related derivative | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative assets (liabilities), at fair value, net | 323 | 282 | ||
Energy related derivative | Future Natural Gas Prices | Utica Shale | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 0 | 7 | ||
Derivative assets (liabilities), at fair value, net | 0 | 7 | ||
Quoted Prices in Active Markets (Level 1) | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative assets (liabilities), at fair value, net | 0 | 0 | ||
Quoted Prices in Active Markets (Level 1) | Commodity contract | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 0 | 0 | ||
Derivative liability | 0 | 0 | ||
Quoted Prices in Active Markets (Level 1) | Energy related derivative | Future Natural Gas Prices | Utica Shale | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 0 | 0 | ||
Significant Other Observable Inputs (Level 2) | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative assets (liabilities), at fair value, net | 291 | 188 | ||
Significant Other Observable Inputs (Level 2) | Commodity contract | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 307 | 319 | ||
Derivative liability | 16 | 131 | ||
Significant Other Observable Inputs (Level 2) | Energy related derivative | Future Natural Gas Prices | Utica Shale | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 0 | 0 | ||
Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative assets (liabilities), at fair value, net | 32 | 94 | ||
Significant Unobservable Inputs (Level 3) | Commodity contract | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 40 | 103 | ||
Derivative liability | 8 | 16 | ||
Derivative assets (liabilities), at fair value, net | 32 | 87 | $ (5) | $ (15) |
Significant Unobservable Inputs (Level 3) | Energy related derivative | Future Natural Gas Prices | Utica Shale | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Derivative asset | 0 | 7 | ||
Derivative assets (liabilities), at fair value, net | $ 0 | $ 7 | $ 0 | $ 0 |
Derivative and Hedging Activi_9
Derivative and Hedging Activities - Fair Value Level 3 Measurements (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Derivative assets (liabilities), at fair value, net, beginning of period | $ 282 | |
Derivative assets (liabilities), at fair value, net, end of period | 323 | |
Energy related derivative | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Derivative assets (liabilities), at fair value, net, beginning of period | 282 | |
Derivative assets (liabilities), at fair value, net, end of period | 323 | |
Future Natural Gas Prices | Utica Shale | Energy related derivative | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Derivative assets (liabilities), at fair value, net, beginning of period | 7 | |
Derivative assets (liabilities), at fair value, net, end of period | 0 | |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Derivative assets (liabilities), at fair value, net, beginning of period | 94 | |
Derivative assets (liabilities), at fair value, net, end of period | 32 | |
Significant Unobservable Inputs (Level 3) | Commodity contract | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Derivative assets (liabilities), at fair value, net, beginning of period | 87 | $ (15) |
Gains (loses) included in earnings | (47) | (3) |
Settlements | (8) | 13 |
Derivative assets (liabilities), at fair value, net, end of period | 32 | (5) |
Significant Unobservable Inputs (Level 3) | Commodity contract | Oil, natural gas and NGL sales | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Gains (loses) included in earnings | (47) | (3) |
Change in unrealized gains (losses) related to assets still held at reporting date | (57) | (3) |
Significant Unobservable Inputs (Level 3) | Future Natural Gas Prices | Utica Shale | Energy related derivative | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Derivative assets (liabilities), at fair value, net, beginning of period | 7 | 0 |
Gains (loses) included in earnings | (7) | 0 |
Settlements | 0 | 0 |
Derivative assets (liabilities), at fair value, net, end of period | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Future Natural Gas Prices | Utica Shale | Energy related derivative | Oil, natural gas and NGL sales | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Gains (loses) included in earnings | (7) | 0 |
Change in unrealized gains (losses) related to assets still held at reporting date | $ (7) | $ 0 |
Derivative and Hedging Activ_10
Derivative and Hedging Activities - Quantitative Disclosures Level 3 (Details) - Energy related derivative $ in Millions | Sep. 30, 2019USD ($) |
Oil | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Fair value, measurement with unobservable inputs reconciliations, recurring basis, asset value | $ 33 |
Natural Gas | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Fair value, measurement with unobservable inputs reconciliations, recurring basis, liability value | $ (1) |
Price volatility | Oil | Weighted average | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Measurement input | 0.3255 |
Price volatility | Oil | Minimum | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Measurement input | 0.2462 |
Price volatility | Oil | Maximum | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Measurement input | 0.4877 |
Price volatility | Natural Gas | Weighted average | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Measurement input | 0.3740 |
Price volatility | Natural Gas | Minimum | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Measurement input | 0.1337 |
Price volatility | Natural Gas | Maximum | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Measurement input | 1.4537 |
Derivative and Hedging Activ_11
Derivative and Hedging Activities - Narrative (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)counterpartyderivative | Dec. 31, 2018USD ($)dayderivative$ / BTU | |
Derivative [Line Items] | ||
Expected amount to be transferred of during the next 12 months | $ 34 | |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, number of instruments held | derivative | 0 | 0 |
Credit Risk | ||
Derivative [Line Items] | ||
Number of counterparties in hedge facility | counterparty | 15 | |
Disposal group, disposed of by sale, not discontinued operations | Utica Shale | Future Natural Gas Prices | ||
Derivative [Line Items] | ||
Disposal group, including discontinued operation, consideration | $ 100 | |
Debt instrument, convertible, threshold trading days | day | 20 | |
Debt instrument, convertible, threshold consecutive trading days | day | 30 | |
Unrealized gain (loss) | $ (7) | |
2022 NYMEX Natural Gas | Disposal group, disposed of by sale, not discontinued operations | Utica Shale | Future Natural Gas Prices | ||
Derivative [Line Items] | ||
Disposal group, including discontinued operation, consideration | $ 50 | |
2022 NYMEX Natural Gas | Disposal group, disposed of by sale, not discontinued operations | Utica Shale | Future Natural Gas Prices 2022 | ||
Derivative [Line Items] | ||
Average sales prices (in dollars per mmbtu) | $ / BTU | 3 | |
2022 NYMEX Natural Gas | Disposal group, disposed of by sale, not discontinued operations | Utica Shale | Future Natural Gas Prices 2023 | ||
Derivative [Line Items] | ||
Average sales prices (in dollars per mmbtu) | $ / BTU | 3.25 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
JWH Midstream LLC (JWH) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Business acquisition, percent acquired | 50.00% | 50.00% | ||
Equity method investments | $ 17 | |||
Payments to terminate involvement in partnership | $ 7 | |||
Impairment expense | $ 24 | |||
FTS International, Inc. | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment, ownership percentage | 20.00% | 20.00% | 29.00% | |
Investment, realized gain (loss) | $ 61 | |||
Number of shares sold (in shares) | 4.3 | |||
Proceeds from sale of equity method investments | $ 74 | |||
Shares held (in shares) | 22 | 22 | ||
Book value | $ 65 | $ 65 | ||
FTS International, Inc. | IPO | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment, ownership percentage | 24.00% | 24.00% | ||
Investment, realized gain (loss) | $ 78 |
Other Operating Expenses - Narr
Other Operating Expenses - Narrative (Details) - Wildhorse Resource Development Corporation $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Business Acquisition [Line Items] | |
Acquisition related costs | $ 34 |
Severance expense | $ 38 |
Restructuring and Other Termi_2
Restructuring and Other Termination Costs (Details) - USD ($) $ in Millions | Jan. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | [1] | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other termination costs, number of positions eliminated, period percent | 13.00% | ||||||
Restructuring and other termination costs | $ 0 | $ 0 | $ 0 | $ 38 | [1] | ||
One-time termination benefits | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other termination costs | $ 38 | ||||||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Table (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability), total | $ 1 | $ (1) |
Short-term derivative asset | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current assets | 46 | 50 |
Short-term derivative liability | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current liabilities | (45) | (51) |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability), total | 1 | (1) |
Quoted Prices in Active Markets (Level 1) | Short-term derivative asset | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current assets | 46 | 50 |
Quoted Prices in Active Markets (Level 1) | Short-term derivative liability | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current liabilities | (45) | (51) |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability), total | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Short-term derivative asset | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Short-term derivative liability | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability), total | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Short-term derivative asset | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Short-term derivative liability | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other current liabilities | $ 0 | $ 0 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Narrative (Details) | Sep. 30, 2019 |
Owned subsidiaries | Senior notes | |
Condensed Financial Statements, Captions [Line Items] | |
Noncontrolling interest, ownership percentage by parent | 100.00% |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | [1] |
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 14 | $ 4 | ||
Other current assets | 1,389 | 1,594 | ||
Intercompany receivable, net | 0 | 0 | ||
Total Current Assets | 1,403 | 1,598 | ||
PROPERTY AND EQUIPMENT: | ||||
Oil and natural gas properties, at cost based on successful efforts accounting, net | 13,734 | 9,712 | ||
Other property and equipment, net | 1,132 | 1,091 | ||
Property and equipment held for sale, net | 10 | 15 | ||
Total Property and Equipment, Net | 14,876 | 10,818 | ||
LONG-TERM ASSETS: | ||||
Other long-term assets | 300 | 319 | ||
Investments in subsidiaries and intercompany advances | 0 | 0 | ||
TOTAL ASSETS | 16,579 | 12,735 | ||
CURRENT LIABILITIES: | ||||
Current liabilities | 2,348 | 2,887 | ||
Intercompany payable, net | 0 | 0 | ||
Total Current Liabilities | 2,348 | 2,887 | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt, net | 9,133 | 7,341 | ||
Deferred income tax liabilities | 0 | |||
Other long-term liabilities | 363 | 374 | ||
Total Long-Term Liabilities | 9,496 | 7,715 | ||
EQUITY: | ||||
Chesapeake stockholders’ equity | 4,696 | 2,092 | ||
Noncontrolling interests | 39 | 41 | ||
Total Equity | 4,735 | 2,133 | $ 1,535 | |
TOTAL LIABILITIES AND EQUITY | 16,579 | 12,735 | ||
Eliminations | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | (5) | (2) | ||
Other current assets | 0 | 0 | ||
Intercompany receivable, net | (6,275) | (6,671) | ||
Total Current Assets | (6,280) | (6,673) | ||
PROPERTY AND EQUIPMENT: | ||||
Oil and natural gas properties, at cost based on successful efforts accounting, net | 0 | 0 | ||
Other property and equipment, net | 0 | 0 | ||
Property and equipment held for sale, net | 0 | 0 | ||
Total Property and Equipment, Net | 0 | 0 | ||
LONG-TERM ASSETS: | ||||
Other long-term assets | (297) | 0 | ||
Investments in subsidiaries and intercompany advances | (8,351) | (3,257) | ||
TOTAL ASSETS | (14,928) | (9,930) | ||
CURRENT LIABILITIES: | ||||
Current liabilities | (5) | (2) | ||
Intercompany payable, net | (6,275) | (6,671) | ||
Total Current Liabilities | (6,280) | (6,673) | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt, net | 0 | 0 | ||
Deferred income tax liabilities | (297) | |||
Other long-term liabilities | 0 | 0 | ||
Total Long-Term Liabilities | (297) | 0 | ||
EQUITY: | ||||
Chesapeake stockholders’ equity | (8,351) | (3,257) | ||
Noncontrolling interests | 0 | 0 | ||
Total Equity | (8,351) | (3,257) | ||
TOTAL LIABILITIES AND EQUITY | (14,928) | (9,930) | ||
Parent | Reportable legal entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 8 | 4 | ||
Other current assets | 56 | 60 | ||
Intercompany receivable, net | 6,275 | 6,671 | ||
Total Current Assets | 6,339 | 6,735 | ||
PROPERTY AND EQUIPMENT: | ||||
Oil and natural gas properties, at cost based on successful efforts accounting, net | 0 | 0 | ||
Other property and equipment, net | 0 | 0 | ||
Property and equipment held for sale, net | 0 | 0 | ||
Total Property and Equipment, Net | 0 | 0 | ||
LONG-TERM ASSETS: | ||||
Other long-term assets | 336 | 26 | ||
Investments in subsidiaries and intercompany advances | 6,013 | 3,248 | ||
TOTAL ASSETS | 12,688 | 10,009 | ||
CURRENT LIABILITIES: | ||||
Current liabilities | 325 | 523 | ||
Intercompany payable, net | 0 | 0 | ||
Total Current Liabilities | 325 | 523 | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt, net | 7,612 | 7,341 | ||
Deferred income tax liabilities | 0 | |||
Other long-term liabilities | 55 | 53 | ||
Total Long-Term Liabilities | 7,667 | 7,394 | ||
EQUITY: | ||||
Chesapeake stockholders’ equity | 4,696 | 2,092 | ||
Noncontrolling interests | 0 | 0 | ||
Total Equity | 4,696 | 2,092 | ||
TOTAL LIABILITIES AND EQUITY | 12,688 | 10,009 | ||
Guarantor Subsidiaries | Reportable legal entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 1 | 1 | ||
Other current assets | 1,231 | 1,532 | ||
Intercompany receivable, net | 0 | 0 | ||
Total Current Assets | 1,232 | 1,533 | ||
PROPERTY AND EQUIPMENT: | ||||
Oil and natural gas properties, at cost based on successful efforts accounting, net | 9,513 | 9,664 | ||
Other property and equipment, net | 1,046 | 1,091 | ||
Property and equipment held for sale, net | 10 | 15 | ||
Total Property and Equipment, Net | 10,569 | 10,770 | ||
LONG-TERM ASSETS: | ||||
Other long-term assets | 231 | 293 | ||
Investments in subsidiaries and intercompany advances | 2,338 | 9 | ||
TOTAL ASSETS | 14,370 | 12,605 | ||
CURRENT LIABILITIES: | ||||
Current liabilities | 1,805 | 2,365 | ||
Intercompany payable, net | 6,275 | 6,671 | ||
Total Current Liabilities | 8,080 | 9,036 | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt, net | 0 | 0 | ||
Deferred income tax liabilities | 0 | |||
Other long-term liabilities | 277 | 321 | ||
Total Long-Term Liabilities | 277 | 321 | ||
EQUITY: | ||||
Chesapeake stockholders’ equity | 6,013 | 3,248 | ||
Noncontrolling interests | 0 | 0 | ||
Total Equity | 6,013 | 3,248 | ||
TOTAL LIABILITIES AND EQUITY | 14,370 | 12,605 | ||
Non-Guarantor Subsidiaries | Reportable legal entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 10 | 1 | ||
Other current assets | 102 | 2 | ||
Intercompany receivable, net | 0 | 0 | ||
Total Current Assets | 112 | 3 | ||
PROPERTY AND EQUIPMENT: | ||||
Oil and natural gas properties, at cost based on successful efforts accounting, net | 4,221 | 48 | ||
Other property and equipment, net | 86 | 0 | ||
Property and equipment held for sale, net | 0 | 0 | ||
Total Property and Equipment, Net | 4,307 | 48 | ||
LONG-TERM ASSETS: | ||||
Other long-term assets | 30 | 0 | ||
Investments in subsidiaries and intercompany advances | 0 | 0 | ||
TOTAL ASSETS | 4,449 | 51 | ||
CURRENT LIABILITIES: | ||||
Current liabilities | 223 | 1 | ||
Intercompany payable, net | 0 | 0 | ||
Total Current Liabilities | 223 | 1 | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt, net | 1,521 | 0 | ||
Deferred income tax liabilities | 297 | |||
Other long-term liabilities | 31 | 0 | ||
Total Long-Term Liabilities | 1,849 | 0 | ||
EQUITY: | ||||
Chesapeake stockholders’ equity | 2,338 | 9 | ||
Noncontrolling interests | 39 | 41 | ||
Total Equity | 2,377 | 50 | ||
TOTAL LIABILITIES AND EQUITY | $ 4,449 | $ 51 | ||
[1] | Financial information for prior periods has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
REVENUES AND OTHER: | ||||||
Revenues | $ 2,087 | $ 2,424 | [1] | $ 6,669 | $ 7,237 | [1] |
Gains on sales of assets | 13 | (10) | [1] | 33 | 27 | [1],[2] |
OPERATING EXPENSES: | ||||||
Production taxes | 35 | 34 | [1] | 109 | 91 | [1] |
General and administrative | 66 | 81 | [1] | 258 | 273 | [1] |
Restructuring and other termination costs | 0 | 0 | [1] | 0 | 38 | [1] |
Provision for legal contingencies, net | 0 | 8 | [1] | 3 | 17 | [1] |
Depreciation, depletion and amortization | 573 | 405 | [1] | 1,672 | 1,335 | [1],[2] |
Impairments | 9 | 58 | [1] | 11 | 122 | [1],[2] |
Other operating (income) expense | 15 | 0 | [1] | 79 | (1) | [1] |
Total Operating Expenses | 2,041 | 2,342 | [1] | 6,527 | 7,273 | [1] |
INCOME (LOSS) FROM OPERATIONS | 46 | 82 | [1] | 142 | (36) | [1] |
OTHER INCOME (EXPENSE): | ||||||
Interest expense | (177) | (165) | [1] | (513) | (482) | [1] |
Gains (losses) on investments | (4) | 0 | [1] | (28) | 139 | [1] |
Gains (losses) on purchases or exchanges of debt | 70 | (68) | [1] | 70 | (68) | [1] |
Other income | 3 | 6 | [1] | 30 | 62 | [1] |
Equity in net earnings of subsidiary | 0 | 0 | 0 | 0 | ||
Total Other Expense | (108) | (227) | [1] | (441) | (349) | [1] |
LOSS BEFORE INCOME TAXES | (62) | (145) | [1] | (299) | (385) | [1] |
INCOME TAX (BENEFIT) EXPENSE | (1) | 1 | [1] | (315) | (8) | [1] |
NET INCOME (LOSS) | (61) | (146) | [1],[3] | 16 | (377) | [1],[2],[3] |
Net income attributable to noncontrolling interests | 0 | 0 | [1],[3] | 0 | (1) | [1],[3] |
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (61) | (146) | [1] | 16 | (378) | [1] |
Other comprehensive income | 8 | 8 | [3] | 26 | 25 | [3] |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (53) | (138) | [3] | 42 | (353) | [3] |
Eliminations | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Gains on sales of assets | 0 | 0 | 0 | 0 | ||
OPERATING EXPENSES: | ||||||
Production taxes | 0 | 0 | 0 | 0 | ||
General and administrative | 0 | 0 | 0 | 0 | ||
Restructuring and other termination costs | 0 | |||||
Provision for legal contingencies, net | 0 | 0 | 0 | |||
Depreciation, depletion and amortization | 0 | 0 | 0 | 0 | ||
Impairments | 0 | 0 | 0 | 0 | ||
Other operating (income) expense | 0 | 0 | 0 | |||
Total Operating Expenses | 0 | 0 | 0 | 0 | ||
INCOME (LOSS) FROM OPERATIONS | 0 | 0 | 0 | 0 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense | 0 | 0 | 0 | 0 | ||
Gains (losses) on investments | 0 | 0 | 0 | |||
Gains (losses) on purchases or exchanges of debt | 0 | 0 | 0 | 0 | ||
Other income | 0 | 0 | 0 | 0 | ||
Equity in net earnings of subsidiary | (27) | (86) | (41) | (162) | ||
Total Other Expense | (27) | (86) | (41) | (162) | ||
LOSS BEFORE INCOME TAXES | (27) | (86) | (41) | (162) | ||
INCOME TAX (BENEFIT) EXPENSE | 0 | 0 | 0 | 0 | ||
NET INCOME (LOSS) | (27) | (86) | (41) | (162) | ||
Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | ||
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (27) | (86) | (41) | (162) | ||
Other comprehensive income | 0 | 0 | 0 | 0 | ||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (27) | (86) | (41) | (162) | ||
Parent | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Gains on sales of assets | 0 | 0 | 0 | 0 | ||
OPERATING EXPENSES: | ||||||
Production taxes | 0 | 0 | 0 | 0 | ||
General and administrative | 0 | 0 | 0 | 0 | ||
Restructuring and other termination costs | 0 | |||||
Provision for legal contingencies, net | 0 | 0 | 0 | |||
Depreciation, depletion and amortization | 0 | 0 | 0 | 0 | ||
Impairments | 0 | 0 | 0 | 0 | ||
Other operating (income) expense | 0 | 0 | 0 | |||
Total Operating Expenses | 0 | 0 | 0 | 0 | ||
INCOME (LOSS) FROM OPERATIONS | 0 | 0 | 0 | 0 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense | (161) | (163) | (475) | (480) | ||
Gains (losses) on investments | 0 | 0 | 0 | |||
Gains (losses) on purchases or exchanges of debt | 64 | (68) | 64 | (68) | ||
Other income | 0 | 0 | 0 | 0 | ||
Equity in net earnings of subsidiary | 25 | 86 | 129 | 162 | ||
Total Other Expense | (72) | (145) | (282) | (386) | ||
LOSS BEFORE INCOME TAXES | (72) | (145) | (282) | (386) | ||
INCOME TAX (BENEFIT) EXPENSE | (11) | 1 | (298) | (8) | ||
NET INCOME (LOSS) | (61) | (146) | 16 | (378) | ||
Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | ||
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (61) | (146) | 16 | (378) | ||
Other comprehensive income | 0 | 0 | 0 | 0 | ||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | (61) | (146) | 16 | (378) | ||
Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 1,849 | 2,419 | 6,116 | 7,223 | ||
Gains on sales of assets | 13 | (10) | 33 | 27 | ||
OPERATING EXPENSES: | ||||||
Production taxes | 25 | 33 | 83 | 90 | ||
General and administrative | 43 | 81 | 193 | 272 | ||
Restructuring and other termination costs | 38 | |||||
Provision for legal contingencies, net | 8 | 3 | 17 | |||
Depreciation, depletion and amortization | 421 | 403 | 1,295 | 1,330 | ||
Impairments | 9 | 58 | 11 | 122 | ||
Other operating (income) expense | 15 | 41 | (1) | |||
Total Operating Expenses | 1,828 | 2,337 | 5,936 | 7,261 | ||
INCOME (LOSS) FROM OPERATIONS | 21 | 82 | 180 | (38) | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense | 3 | (2) | 13 | (2) | ||
Gains (losses) on investments | (4) | (4) | 139 | |||
Gains (losses) on purchases or exchanges of debt | 0 | 0 | 0 | 0 | ||
Other income | 3 | 6 | 28 | 62 | ||
Equity in net earnings of subsidiary | 2 | 0 | (88) | 1 | ||
Total Other Expense | 4 | 4 | (51) | 200 | ||
LOSS BEFORE INCOME TAXES | 25 | 86 | 129 | 162 | ||
INCOME TAX (BENEFIT) EXPENSE | 0 | 0 | 0 | 0 | ||
NET INCOME (LOSS) | 25 | 86 | 129 | 162 | ||
Net income attributable to noncontrolling interests | 0 | 0 | 0 | (1) | ||
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | 25 | 86 | 129 | 161 | ||
Other comprehensive income | 8 | 8 | 26 | 25 | ||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | 33 | 94 | 155 | 186 | ||
Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 238 | 5 | 553 | 14 | ||
Gains on sales of assets | 0 | 0 | 0 | 0 | ||
OPERATING EXPENSES: | ||||||
Production taxes | 10 | 1 | 26 | 1 | ||
General and administrative | 23 | 0 | 65 | 1 | ||
Restructuring and other termination costs | 0 | |||||
Provision for legal contingencies, net | 0 | 0 | 0 | |||
Depreciation, depletion and amortization | 152 | 2 | 377 | 5 | ||
Impairments | 0 | 0 | 0 | 0 | ||
Other operating (income) expense | 0 | 38 | 0 | |||
Total Operating Expenses | 213 | 5 | 591 | 12 | ||
INCOME (LOSS) FROM OPERATIONS | 25 | 0 | (38) | 2 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense | (19) | 0 | (51) | 0 | ||
Gains (losses) on investments | 0 | (24) | 0 | |||
Gains (losses) on purchases or exchanges of debt | 6 | 0 | 6 | 0 | ||
Other income | 0 | 0 | 2 | 0 | ||
Equity in net earnings of subsidiary | 0 | 0 | 0 | (1) | ||
Total Other Expense | (13) | 0 | (67) | (1) | ||
LOSS BEFORE INCOME TAXES | 12 | 0 | (105) | 1 | ||
INCOME TAX (BENEFIT) EXPENSE | 10 | 0 | (17) | 0 | ||
NET INCOME (LOSS) | 2 | 0 | (88) | 1 | ||
Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | ||
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | 2 | 0 | (88) | 1 | ||
Other comprehensive income | 0 | 0 | 0 | 0 | ||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE | 2 | 0 | (88) | 1 | ||
Oil, natural gas and NGL | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 1,170 | 1,199 | [1] | 3,553 | 3,424 | [1] |
Oil, natural gas and NGL | Eliminations | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL | Parent | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL | Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 932 | 1,194 | 3,000 | 3,410 | ||
Oil, natural gas and NGL | Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 238 | 5 | 553 | 14 | ||
Marketing | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 889 | 1,219 | [1] | 3,038 | 3,738 | [1] |
OPERATING EXPENSES: | ||||||
Expense | 901 | 1,238 | [1] | 3,071 | 3,798 | [1] |
Marketing | Eliminations | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Marketing | Parent | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Marketing | Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 889 | 1,219 | 3,038 | 3,738 | ||
OPERATING EXPENSES: | ||||||
Expense | 901 | 1,238 | 3,071 | 3,798 | ||
Marketing | Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL and Marketing | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 2,059 | 2,418 | [1] | 6,591 | 7,162 | [1] |
Oil, natural gas and NGL and Marketing | Eliminations | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL and Marketing | Parent | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL and Marketing | Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 1,821 | 2,413 | 6,038 | 7,148 | ||
Oil, natural gas and NGL and Marketing | Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 238 | 5 | 553 | 14 | ||
Other | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 15 | 16 | [1] | 45 | 48 | [1] |
Other | Eliminations | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Other | Parent | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Other | Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 15 | 16 | 45 | 48 | ||
Other | Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
REVENUES AND OTHER: | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL production | ||||||
OPERATING EXPENSES: | ||||||
Expense | 155 | 132 | [1] | 453 | 417 | [1] |
Oil, natural gas and NGL production | Eliminations | ||||||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL production | Parent | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL production | Guarantor Subsidiaries | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 129 | 132 | 384 | 417 | ||
Oil, natural gas and NGL production | Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 26 | 0 | 69 | 0 | ||
Oil, natural gas and NGL gathering, processing and transportation | ||||||
OPERATING EXPENSES: | ||||||
Expense | 270 | 364 | [1] | 815 | 1,060 | [1] |
Oil, natural gas and NGL gathering, processing and transportation | Eliminations | ||||||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL gathering, processing and transportation | Parent | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Oil, natural gas and NGL gathering, processing and transportation | Guarantor Subsidiaries | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 268 | 362 | 802 | 1,055 | ||
Oil, natural gas and NGL gathering, processing and transportation | Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 2 | 2 | 13 | 5 | ||
Exploration | ||||||
OPERATING EXPENSES: | ||||||
Expense | 17 | 22 | [1] | 56 | 123 | [1] |
Exploration | Eliminations | ||||||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Exploration | Parent | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 0 | 0 | 0 | 0 | ||
Exploration | Guarantor Subsidiaries | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | 17 | 22 | 53 | 123 | ||
Exploration | Non-Guarantor Subsidiaries | Reportable legal entities | ||||||
OPERATING EXPENSES: | ||||||
Expense | $ 0 | $ 0 | $ 3 | $ 0 | ||
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||
[2] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . | |||||
[3] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net Cash Provided By Operating Activities | $ 1,182 | $ 1,395 | [1] |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Drilling and completion costs | (1,640) | (1,407) | [1] |
Business combination, net | (353) | 0 | [1] |
Acquisitions of proved and unproved properties | (31) | (118) | [1] |
Proceeds from divestitures of proved and unproved properties | 110 | 395 | [1] |
Additions to other property and equipment | (27) | (11) | [1] |
Other investing activities | 6 | 149 | |
Net Cash Used In Investing Activities | (1,935) | (992) | [1] |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility borrowings | 8,805 | 9,095 | [1] |
Payments on revolving credit facility borrowings | (7,495) | (9,231) | [1] |
Proceeds from issuance of senior notes, net | 0 | 1,237 | [1] |
Cash paid to purchase debt | (457) | (1,285) | [1] |
Cash paid for preferred stock dividends | (69) | (69) | [1] |
Other financing activities | (21) | (151) | |
Intercompany advances, net | 0 | 0 | |
Net Cash Provided By (Used In) Financing Activities | 763 | (404) | [1] |
Net increase (decrease) in cash and cash equivalents | 10 | (1) | [1] |
Cash and cash equivalents, beginning of period | 4 | 5 | [1] |
Cash and cash equivalents, end of period | 14 | 4 | [1] |
Eliminations | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net Cash Provided By Operating Activities | (3) | (10) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Drilling and completion costs | 0 | 0 | |
Business combination, net | 0 | ||
Acquisitions of proved and unproved properties | 0 | 0 | |
Proceeds from divestitures of proved and unproved properties | 0 | 0 | |
Additions to other property and equipment | 0 | 0 | |
Other investing activities | 0 | 0 | |
Net Cash Used In Investing Activities | 0 | 0 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility borrowings | 0 | 0 | |
Payments on revolving credit facility borrowings | 0 | 0 | |
Proceeds from issuance of senior notes, net | 0 | ||
Cash paid to purchase debt | 0 | 0 | |
Cash paid for preferred stock dividends | 0 | 0 | |
Other financing activities | 3 | (13) | |
Intercompany advances, net | (1) | 22 | |
Net Cash Provided By (Used In) Financing Activities | 2 | 9 | |
Net increase (decrease) in cash and cash equivalents | (1) | (1) | |
Cash and cash equivalents, beginning of period | (2) | (3) | |
Cash and cash equivalents, end of period | (3) | (4) | |
Parent | Reportable legal entities | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net Cash Provided By Operating Activities | 0 | 86 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Drilling and completion costs | 0 | 0 | |
Business combination, net | 0 | ||
Acquisitions of proved and unproved properties | 0 | 0 | |
Proceeds from divestitures of proved and unproved properties | 0 | 0 | |
Additions to other property and equipment | 0 | 0 | |
Other investing activities | 0 | 0 | |
Net Cash Used In Investing Activities | 0 | 0 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility borrowings | 8,096 | 9,095 | |
Payments on revolving credit facility borrowings | (7,011) | (9,231) | |
Proceeds from issuance of senior notes, net | 1,237 | ||
Cash paid to purchase debt | (381) | (1,285) | |
Cash paid for preferred stock dividends | (69) | (69) | |
Other financing activities | (13) | (2) | |
Intercompany advances, net | (620) | 170 | |
Net Cash Provided By (Used In) Financing Activities | 2 | (85) | |
Net increase (decrease) in cash and cash equivalents | 2 | 1 | |
Cash and cash equivalents, beginning of period | 4 | 5 | |
Cash and cash equivalents, end of period | 6 | 6 | |
Guarantor Subsidiaries | Reportable legal entities | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net Cash Provided By Operating Activities | 898 | 1,312 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Drilling and completion costs | (1,204) | (1,407) | |
Business combination, net | (381) | ||
Acquisitions of proved and unproved properties | (31) | (118) | |
Proceeds from divestitures of proved and unproved properties | 110 | 395 | |
Additions to other property and equipment | (12) | (11) | |
Other investing activities | 6 | 149 | |
Net Cash Used In Investing Activities | (1,512) | (992) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility borrowings | 0 | 0 | |
Payments on revolving credit facility borrowings | 0 | 0 | |
Proceeds from issuance of senior notes, net | 0 | ||
Cash paid to purchase debt | 0 | 0 | |
Cash paid for preferred stock dividends | 0 | 0 | |
Other financing activities | (6) | (127) | |
Intercompany advances, net | 620 | (193) | |
Net Cash Provided By (Used In) Financing Activities | 614 | (320) | |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | |
Cash and cash equivalents, beginning of period | 1 | 1 | |
Cash and cash equivalents, end of period | 1 | 1 | |
Non-Guarantor Subsidiaries | Reportable legal entities | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net Cash Provided By Operating Activities | 287 | 7 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Drilling and completion costs | (436) | 0 | |
Business combination, net | 28 | ||
Acquisitions of proved and unproved properties | 0 | 0 | |
Proceeds from divestitures of proved and unproved properties | 0 | 0 | |
Additions to other property and equipment | (15) | 0 | |
Other investing activities | 0 | 0 | |
Net Cash Used In Investing Activities | (423) | 0 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility borrowings | 709 | 0 | |
Payments on revolving credit facility borrowings | (484) | 0 | |
Proceeds from issuance of senior notes, net | 0 | ||
Cash paid to purchase debt | (76) | 0 | |
Cash paid for preferred stock dividends | 0 | 0 | |
Other financing activities | (5) | (9) | |
Intercompany advances, net | 1 | 1 | |
Net Cash Provided By (Used In) Financing Activities | 145 | (8) | |
Net increase (decrease) in cash and cash equivalents | 9 | (1) | |
Cash and cash equivalents, beginning of period | 1 | 2 | |
Cash and cash equivalents, end of period | $ 10 | $ 1 | |
[1] | Financial information for 2018 has been recast to reflect the retrospective application of the successful efforts method of accounting. See Note 1 . |