CONCHO RESOURCES INC, 10-Q filed on 10/30/2019
Quarterly Report
v3.19.3
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2019
Oct. 28, 2019
Document Documentand Entity Information [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2019  
Document Transition Report false  
Entity File Number 1-33615  
Entity Registrant Name Concho Resources Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 76-0818600  
Entity Address, Address Line One One Concho Center  
Entity Address, Address Line Two 600 West Illinois Avenue  
Entity Address, City or Town Midland  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 79701  
City Area Code (432)  
Local Phone Number 683-7443  
Title of 12(b) Security Common Stock, par value $0.001 per share  
Trading Symbol CXO  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   201,028,695
Amendment Flag false  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Entity Central Index Key 0001358071  
Current Fiscal Year End Date --12-31  
v3.19.3
Consolidated Balance Sheets Unaudited - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 0 $ 0
Accounts receivable, net of allowance for doubtful accounts:    
Oil and natural gas 535 466
Joint operations and other 263 365
Inventory 30 35
Assets held for sale 930 0
Derivative instruments 201 484
Prepaid costs and other 58 59
Total current assets 2,017 1,409
Property and equipment:    
Oil and natural gas properties, successful efforts method 28,497 31,706
Accumulated depletion and depreciation (7,477) (9,701)
Total oil and natural gas properties, net 21,020 22,005
Other property and equipment, net 408 308
Total property and equipment, net 21,428 22,313
Deferred loan costs, net 8 10
Goodwill 2,141 2,224
Intangible assets, net 17 19
Noncurrent derivative instruments 121 211
Other assets 400 108
Total assets 26,132 26,294
Current liabilities:    
Accounts payable - trade 66 50
Book overdrafts 55 159
Revenue payable 220 253
Accrued drilling costs 471 574
Liabilities held for sale 69 0
Derivative instruments 15 0
Other current liabilities 444 320
Total current liabilities 1,340 1,356
Long-term debt 4,349 4,194
Deferred income taxes 1,783 1,808
Noncurrent derivative instruments 0 0
Asset retirement obligations and other long-term liabilities 149 168
Commitments and contingencies (Note 9)
Stockholders’ equity:    
Common stock, $0.001 par value; 300,000,000 authorized; 202,216,989 and 201,288,884 shares issued at September 30, 2019 and December 31, 2018, respectively 0 0
Additional paid-in capital 14,840 14,773
Retained earnings 3,817 4,126
Treasury stock, at cost; 1,172,545 and 1,031,655 shares at September 30, 2019 and December 31, 2018, respectively (146) (131)
Total stockholders’ equity 18,511 18,768
Total liabilities and stockholders’ equity $ 26,132 $ 26,294
v3.19.3
Consolidated Balance Sheets Unaudited (Parenthetical) - $ / shares
Sep. 30, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 300,000,000 300,000,000
Common stock, shares issued 202,216,989 201,288,884
Treasury shares 1,172,545 1,031,655
v3.19.3
Consolidated Statements of Operations Unaudited - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Operating revenues:        
Total operating revenues $ 1,115 $ 1,192 $ 3,346 $ 3,084
Operating costs and expenses:        
Production and ad valorem taxes 85 89 255 229
Exploration and abandonments 26 10 90 36
Depreciation, depletion and amortization 488 406 1,431 1,033
Accretion of discount on asset retirement obligations 3 3 8 7
Impairments of long-lived assets 101 0 969 0
General and administrative (including non-cash stock-based compensation of $20 and $23 for the three months ended September 30, 2019 and 2018, respectively, and $67 and $58 for the nine months ended September 30, 2019 and 2018, respectively) 75 84 254 221
(Gain) loss on derivatives (397) 625 445 793
(Gain) loss on disposition of assets, net (303) 5 (303) (719)
Transaction costs 0 23 1 39
Total operating costs and expenses 293 1,417 3,775 2,091
Income (loss) from operations 822 (225) (429) 993
Other income (expense):        
Interest expense (46) (46) (141) (103)
Other, net 4 3 311 108
Total other income (expense) (42) (43) 170 5
Income (loss) before income taxes 780 (268) (259) 998
Income tax (expense) benefit (222) 69 25 (225)
Net income (loss) $ 558 $ (199) $ (234) $ 773
Earnings per share:        
Basic net income (loss) (in dollars per share) $ 2.78 $ (1.05) $ (1.18) $ 4.74
Diluted net income (loss) (in dollars per share) $ 2.78 $ (1.05) $ (1.18) $ 4.74
Oil        
Operating revenues:        
Total operating revenues $ 1,023 $ 957 $ 3,007 $ 2,545
Natural Gas        
Operating revenues:        
Total operating revenues 92 235 339 539
Oil And Natural Gas Production        
Operating costs and expenses:        
Operating costs and expenses 190 156 552 416
Gathering, Processing and Transportation        
Operating costs and expenses:        
Operating costs and expenses $ 25 $ 16 $ 73 $ 36
v3.19.3
Consolidated Statements of Operations Unaudited (Parenthetical) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Income Statement [Abstract]        
Non-cash stock-based compensation $ 20 $ 23 $ 67 $ 58
v3.19.3
Consolidated Statements of Stockholders Equity Unaudited - USD ($)
shares in Thousands, $ in Millions
Total
Common Stock Issued
Additional Paid-in Capital
Retained Earnings
Treasury Stock
Balance (in shares) at Dec. 31, 2017   149,325     598
Balance at Dec. 31, 2017 $ 8,915 $ 0 $ 7,142 $ 1,840 $ (67)
Increase (Decrease) in Stockholders' Equity          
Net income (loss) 773     773  
Grants of restricted stock (in shares)   646      
Performance unit share conversion (in shares)   446      
Cancellation of restricted stock (in shares)   (64)      
Stock-based compensation 58   58    
Purchase of treasury stock (in shares)         430
Purchase of treasury stock (63)       $ (63)
Common stock issued in business combination (in shares)   50,915      
Common stock issued in business combination 7,549   7,549    
Balance (in shares) at Sep. 30, 2018   201,268     1,028
Balance at Sep. 30, 2018 17,232 $ 0 14,749 2,613 $ (130)
Balance (in shares) at Jun. 30, 2018   150,195     813
Balance at Jun. 30, 2018 9,891 $ 0 7,177 2,812 $ (98)
Increase (Decrease) in Stockholders' Equity          
Net income (loss) (199)     (199)  
Grants of restricted stock (in shares)   199      
Performance unit share conversion (in shares)   0      
Cancellation of restricted stock (in shares)   (41)      
Stock-based compensation 23   23    
Purchase of treasury stock (in shares)         215
Purchase of treasury stock (32)       $ (32)
Common stock issued in business combination (in shares)   50,915      
Common stock issued in business combination 7,549   7,549    
Balance (in shares) at Sep. 30, 2018   201,268     1,028
Balance at Sep. 30, 2018 17,232 $ 0 14,749 2,613 $ (130)
Balance (in shares) at Dec. 31, 2018   201,289     1,032
Balance at Dec. 31, 2018 18,768 $ 0 14,773 4,126 $ (131)
Increase (Decrease) in Stockholders' Equity          
Net income (loss) (234)     (234)  
Common stock dividends (75)     (75)  
Grants of restricted stock (in shares)   772      
Performance unit share conversion (in shares)   246      
Cancellation of restricted stock (in shares)   (90)      
Stock-based compensation 67   67    
Purchase of treasury stock (in shares)         141
Purchase of treasury stock (15)       $ (15)
Common stock issued in business combination 0        
Balance (in shares) at Sep. 30, 2019   202,217     1,173
Balance at Sep. 30, 2019 18,511 $ 0 14,840 3,817 $ (146)
Balance (in shares) at Jun. 30, 2019   201,765     1,166
Balance at Jun. 30, 2019 17,959 $ 0 14,820 3,284 $ (145)
Increase (Decrease) in Stockholders' Equity          
Net income (loss) 558     558  
Common stock dividends (25)     (25)  
Grants of restricted stock (in shares)   511      
Performance unit share conversion (in shares)   0      
Cancellation of restricted stock (in shares)   (59)      
Stock-based compensation 20   20    
Purchase of treasury stock (in shares)         7
Purchase of treasury stock (1)       $ (1)
Balance (in shares) at Sep. 30, 2019   202,217     1,173
Balance at Sep. 30, 2019 $ 18,511 $ 0 $ 14,840 $ 3,817 $ (146)
v3.19.3
Consolidated Statements of Stockholders Equity Unaudited (Parenthetical) - $ / shares
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Statement of Stockholders' Equity [Abstract]    
Dividends declared, amount per share (in dollars per share) $ 0.125 $ 0.375
v3.19.3
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) $ (234) $ 773
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation, depletion and amortization 1,431 1,033
Accretion of discount on asset retirement obligations 8 7
Impairments of long-lived assets 969 0
Exploration and abandonments 68 20
Non-cash stock-based compensation expense 67 58
Deferred income taxes (25) 225
Net gain on disposition of assets and other non-operating items (591) (719)
Loss on derivatives 445 793
Net settlements paid on derivatives (57) (238)
Other (6) (94)
Changes in operating assets and liabilities, net of acquisitions and dispositions:    
Accounts receivable (19) (57)
Prepaid costs and other (1) (15)
Inventory 2 (12)
Accounts payable 16 (27)
Revenue payable (20) 62
Other current liabilities 14 52
Net cash provided by operating activities 2,067 1,861
CASH FLOWS FROM INVESTING ACTIVITIES:    
Additions to oil and natural gas properties (2,385) (1,669)
Acquisitions of oil and natural gas properties (34) (105)
Additions to property, equipment and other assets (82) (53)
Proceeds from the disposition of assets 393 260
Deposit for pending divestiture of oil and natural gas properties 93 0
Direct transaction costs for asset acquisitions and dispositions (5) (3)
Distribution from equity method investment 0 148
Net cash used in investing activities (2,020) (1,422)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowings under credit facility 2,680 2,408
Payments on credit facility (2,527) (2,537)
Issuance of senior notes, net 0 1,595
Repayments of RSP debt 0 (1,690)
Debt extinguishment costs 0 (83)
Payments for loan costs 0 (16)
Payment of common stock dividends (75) 0
Purchases of treasury stock (15) (63)
Decrease in book overdrafts (104) (29)
Other (6) 0
Net cash used in financing activities (47) (415)
Net increase (decrease) in cash and cash equivalents 0 24
Cash and cash equivalents at beginning of period 0 0
Cash and cash equivalents at end of period 0 24
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Common stock issued in business combination $ 0 $ 7,549
v3.19.3
Organization and nature of operations
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and nature of operations Organization and nature of operations
Concho Resources Inc., a Delaware corporation (the “Company”), is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties. The Company's operations are primarily focused in the Permian Basin of West Texas and Southeast New Mexico.
v3.19.3
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
A complete discussion of the Company’s significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”).
Principles of consolidation. The consolidated financial statements of the Company include the accounts of the Company and its 100 percent owned subsidiaries. The Company consolidates the financial statements of these entities. All material intercompany balances and transactions have been eliminated.
Reclassifications. Certain prior period amounts have been reclassified to conform to the 2019 presentation. These reclassifications had no impact on net income (loss), total assets, liabilities and stockholders’ equity or total cash flows.
Use of estimates in the preparation of financial statements. Preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Depletion of oil and natural gas properties is determined using estimates of proved oil and natural gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved oil and natural gas reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and natural gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves, commodity price outlooks and prevailing market rates of other sources of income and costs. Other significant estimates include, but are not limited to, asset retirement obligations, goodwill, fair value of stock-based compensation, fair value of business combinations, fair value of nonmonetary transactions, fair value of derivative financial instruments and income taxes.
Assets held for sale. On August 29, 2019, the Company entered into a definitive agreement to sell its New Mexico Shelf assets and has reflected the related assets and liabilities as held for sale in the consolidated balance sheet at September 30, 2019. Refer to Note 4 for further information regarding the Company’s pending sale of its New Mexico Shelf assets.
On the date at which the Company determined the asset group met all of the held for sale criteria, the Company discontinued the recording of depletion and depreciation of the asset or asset group to be sold and reclassified it as held for sale in the accompanying consolidated balance sheets. These assets held for sale were measured at the fair value less cost to sell.
Interim financial statements. The accompanying consolidated financial statements of the Company have not been audited by the Company’s independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2018 is derived from audited consolidated financial statements. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments necessary to present fairly the Company’s consolidated financial statements. All such adjustments are of a normal, recurring nature. In preparing the accompanying consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.
Certain disclosures have been condensed in or omitted from these consolidated financial statements. Accordingly, these condensed notes to the consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s 2018 Form 10-K.
Equity method investments. The Company holds membership interests in certain entities and accounts for these investments using the equity method of accounting.
The Company owns a 50 percent membership interest in Beta Holding Company, LLC, a midstream joint venture formed to construct a crude oil gathering system in the Midland Basin.
The Company owns a 20 percent membership interest in Solaris Midstream Holdings, LLC, an entity that owns and operates water gathering, transportation, disposal, recycling and storage infrastructure assets in the Permian Basin.
The Company owns a preferred membership interest in WaterBridge Operating LLC, an entity that operates and manages various water infrastructure assets located in the Permian Basin.
The Company includes its equity method investment balance in other assets on the consolidated balance sheets. The Company records its share of equity investment earnings and losses in other income (expense) on the consolidated statements of operations. The Company recorded equity method investment income of $15 million and $5 million for the nine months ended September 30, 2019 and 2018, respectively. The Company also contributed certain water infrastructure assets and recorded a gain of $299 million, which is included in gain on disposition of assets, net on the Company’s consolidated statements of operations for the three and nine months ended September 30, 2019.
Until May 2019, the Company owned a 23.75 percent membership interest in Oryx Southern Delaware Holdings, LLC (“Oryx”), an entity that owned and operated Oryx I, a crude oil gathering and transportation system in the Delaware Basin (“Oryx I”). In February 2018, Oryx obtained a term loan of $800 million. The proceeds were used in part to fund a cash distribution to its equity holders, of which the Company received a distribution of approximately $157 million. Of this amount, approximately $54 million fully offset the Company’s net investment in Oryx. The net investment of $54 million included $45 million of Company's contributions made to Oryx and $9 million of equity income. The remaining distribution of approximately $103 million was recorded in other income (expense) on the Company’s consolidated statement of operations. In May 2019, Oryx completed the sale of 100 percent of its equity interests in Oryx I. The Company received $289 million, net of closing costs, in connection with the sale of Oryx I and recorded a gain in other income (expense) on the Company’s consolidated statement of operations for the nine months ended September 30, 2019
Litigation contingencies. The Company is a party to proceedings and claims incidental to its business. In each reporting period, the Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its consolidated financial statements. The amount of any resulting losses may differ from these estimates. An accrual is recorded for a material loss contingency when its occurrence is probable and damages are reasonably estimable. See Note 9 for additional information.
Revenue recognition. The Company recognizes revenues from the sales of oil and natural gas to its customers and presents them disaggregated on the Company’s consolidated statements of operations. All revenues are recognized in the geographical region of the Permian Basin.
The Company enters into contracts with customers to sell its oil and natural gas production. Revenue on these contracts is recognized in accordance with the five-step revenue recognition model prescribed in Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” (“ASC 606”). Specifically, revenue is recognized when the Company’s performance obligations under these contracts are satisfied, which generally occurs with the transfer of control of the oil and natural gas to the purchaser. Control is generally considered transferred when the following criteria are met: (i) transfer of physical custody, (ii) transfer of title, (iii) transfer of risk of loss and (iv) relinquishment of any repurchase rights or other similar rights. Given the nature of the products sold, revenue is recognized at a point in time based on the amount of consideration the Company expects to receive in accordance with the price specified in the contract. Consideration under the oil and natural gas marketing contracts is typically received from the purchaser one to two months after production. At September 30, 2019 and December 31, 2018, the Company had receivables related to contracts with customers of $535 million and $466 million, respectively.
Oil Contracts. The majority of the Company’s oil marketing contracts transfer physical custody and title at or near the wellhead, which is generally when control of the oil has been transferred to the purchaser. The majority of the oil produced is sold under contracts using market-based pricing which is then adjusted for differentials based upon delivery location and oil quality. To the extent the differentials are incurred after the transfer of control of the oil, the differentials are included in oil sales on the consolidated statements of operations as they represent part of the transaction price of the contract. If the differentials, or other related costs, are incurred prior to the transfer of control of the oil, those costs are included in gathering, processing and transportation on the Company’s consolidated statements of operations and are accounted for as costs incurred directly and not netted from the transaction price.
Natural Gas Contracts. The majority of the Company’s natural gas is sold at the lease location, which is generally when control of the natural gas has been transferred to the purchaser. The natural gas is sold under (i) percentage of proceeds processing contracts, (ii) fee-based contracts or (iii) a hybrid of percentage of proceeds and fee-based contracts. Under the majority of the Company’s contracts, the purchaser gathers the natural gas in the field where it is produced and transports it via pipeline to natural gas processing plants where natural gas liquid products are extracted. The natural gas liquid products and remaining residue gas are then sold by the purchaser. Under the percentage of proceeds and hybrid percentage of proceeds and fee-based contracts, the Company receives a percentage of the value for the extracted liquids and the residue gas. Under the fee-based contracts, the Company receives natural gas liquids and residue gas value, less the fee component, or is invoiced the fee component. To the
extent control of the natural gas transfers upstream of the transportation and processing activities, revenue is recognized as the net amount received from the purchaser. To the extent that control transfers downstream of those activities, revenue is recognized on a gross basis, and the related costs are classified in gathering, processing and transportation on the Company’s consolidated statements of operations.
The Company does not disclose the value of unsatisfied performance obligations under its contracts with customers as it applies the practical exemption in accordance with ASC 606. The exemption, as described in ASC 606-10-50-14(a), applies to variable consideration that is recognized as control of the product is transferred to the customer. Since each unit of product represents a separate performance obligation, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.
General and administrative expense. The Company receives fees for the operation of jointly-owned oil and natural gas properties during the drilling and production phases and records such reimbursements as reductions to general and administrative expense. Such fees totaled $5 million and $4 million for the three months ended September 30, 2019 and 2018, respectively, and $13 million for both the nine months ended September 30, 2019 and 2018.
Goodwill. Goodwill is assessed for impairment on an annual basis, or more frequently if indicators of impairment exist. Impairment tests, which involve the use of estimates related to the fair market value of the business operations with which goodwill is associated, are performed as of July 1 of each year. The balance of goodwill is allocated in its entirety to the Company’s one reporting unit. The reporting unit’s fair value is the Company’s enterprise value calculated as the combined market capitalization of the Company’s equity, which includes a control premium, plus the fair value of the Company’s long-term debt. If the results of the quantitative test are such that the fair value of the reporting unit is less than the carrying value, goodwill is then reduced by an amount that is equal to the amount by which the carrying value of the reporting unit exceeds the fair value.
The Company performed a quantitative impairment test during the third quarter of 2019. The fair value of the reporting unit exceeded the carrying value of net assets at July 1, 2019.
As discussed in Note 4, in August 2019, the Company entered into a definitive agreement to sell its assets in the New Mexico Shelf. The Company classified these assets as held for sale at August 29, 2019. The Company allocated $81 million of goodwill to this disposal group, all of which the Company impaired. This impairment charge was recorded in impairments of long-lived assets on the consolidated statements of operations for the three and nine months ended September 30, 2019. See Note 6 for additional impairment discussion of this disposal group. In conjunction with the allocation and impairment of goodwill related to the New Mexico Shelf disposal group, the Company performed a quantitative impairment test for the remaining goodwill. No additional impairment was recorded as the fair value of the reporting unit exceeded the carrying value.
The Company also performed an impairment test at September 30, 2019 due to a decline in the Company’s market capitalization during the third quarter of 2019. The fair value of the reporting unit at September 30, 2019 exceeded the carrying value of net assets, and no additional impairment charges were recorded during the third quarter of 2019. As a result of the aforementioned impairment charge recorded during the current quarter, the Company's goodwill balance decreased from $2.2 billion at December 31, 2018 to $2.1 billion at September 30, 2019.
A decrease in the Company's enterprise value could lead to an impairment of goodwill in future periods. Currently, the primary factor that may negatively affect the Company's enterprise value is a continued depressed level of the Company's stock price. Many factors affecting the Company's stock price are beyond the Company's control and the Company cannot predict the potential effects on the price of its common stock. Stock markets in general can also experience considerable price and volume fluctuations. In addition, deteriorating industry, market and economic conditions could negatively impact the control premium and the Company's enterprise value, which could lead to an impairment of the Company's goodwill balance.
Recently adopted accounting pronouncements.  In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires all leases with a term greater than one year to be recognized on the consolidated balance sheet while maintaining similar classifications for finance and operating leases. Lease expense recognition on the consolidated statements of operations was effectively unchanged. The Company adopted this guidance on January 1, 2019. The Company made policy elections not to capitalize short-term leases for all asset classes and not to separate non-lease components from lease components for all asset classes except for vehicles. The Company also did not elect the package of practical expedients that allowed for certain considerations under the original “Leases (Topic 840)” accounting standard (“Topic 840”) to be carried forward upon adoption of ASU 2016-02.
In January 2018, the FASB issued ASU No. 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” which provides an optional practical expedient not to evaluate land easements that existed or expired before the adoption of ASU 2016-02 and that were not previously accounted for as leases under Topic 840. The Company enters into land easements on a routine basis
as part of its ongoing operations and has many such agreements currently in place; however, the Company did not account for any land easements under Topic 840. As this guidance serves as an amendment to ASU 2016-02, the Company elected this practical expedient, which became effective upon the date of adoption of ASU 2016-02. The Company will assess any new land easements to determine whether the arrangement should be accounted for as a lease. In July 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements,” which provides a transition election not to restate comparative periods for the effects of applying the new lease standard. This transition election permits entities to change the date of initial application to the beginning of the year of adoption and to recognize the effects of applying the new standard as a cumulative-effect adjustment to the opening balance of retained earnings. The Company elected this transition approach, however the cumulative impact of adoption in the opening balance of retained earnings as of January 1, 2019 was zero.
The Company enters into lease agreements to support its operations. These agreements are for leases on assets such as office space, vehicles, field equipment and drilling rigs. Upon adoption, the Company recognized $35 million of right-of-use assets, of which $19 million and $16 million relate to the Company’s operating and finance leases, respectively, and $37 million of associated lease liabilities. See Note 9 for additional disclosures of the Company’s leases.
In August 2018, the Securities and Exchange Commission (“SEC”) issued a final rule that amends certain of its disclosure requirements that have become redundant, duplicative, overlapping, outdated or superseded, in light of other disclosure requirements, U.S. GAAP or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The final rule amends numerous SEC rules, items and forms covering a diverse group of topics, including, but not limited to, changes in stockholders’ equity. The final rule extends the annual disclosure requirement in SEC Regulation S-X, Rule 3-04, of presenting changes in stockholders’ equity to interim periods. Registrants are required to analyze changes in stockholders’ equity in the form of a reconciliation for the current quarter and year-to-date interim periods and comparative periods in the prior year. As a result, the Company updated its presentation of the consolidated statements of stockholders’ equity to include comparative periods in the prior year. In addition, the final rule requires the presentation of dividends per share to be disclosed in the statement of stockholders’ equity.
New accounting pronouncements issued but not yet adopted. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“Topic 326”), which replaces the current “incurred loss” methodology for recognizing credit losses with an “expected loss” methodology. This new methodology requires that a financial asset measured at amortized cost be presented at the net amount expected to be collected. This standard is intended to provide more timely decision-useful information about the expected credit losses on financial instruments. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments–Credit Losses,” which makes amendments to clarify the scope of the guidance, including the amendment clarifying that receivables arising from operating leases are not within the scope of Topic 326. This guidance is effective for fiscal years beginning after December 15, 2019, and early adoption is allowed as early as fiscal years beginning after December 15, 2018. The Company is currently reviewing the potentially impacted financial assets and is developing an internal model for measuring the expected credit losses for those balances. The Company does not believe this new guidance will have a material impact on its consolidated financial statements.
In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”), which, among other things, clarifies that (i) certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account, (ii) adds unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 and (iii) requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and early adoption is permitted. The amendments in this update should be applied retrospectively to the date of initial application of Topic 606. An entity should recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings of the later of the earliest annual period presented and the annual period that includes the date of the entity’s initial application of Topic 606. The Company does not believe this new guidance will have a material impact on its consolidated financial statements.
v3.19.3
RSP Acquisition
9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
RSP Acquisition RSP Acquisition
On July 19, 2018, the Company completed the acquisition of RSP Permian, Inc. (“RSP”) through an all-stock transaction (the “RSP Acquisition”) for approximately $7.5 billion. In connection with the RSP Acquisition, the Company incurred approximately $23 million and $33 million of costs related to consulting, investment banking, advisory, legal and other acquisition-related fees during the three and nine months ended September 30, 2018, respectively, which are included in transaction costs in operating costs and expenses on the consolidated statements of operations. 
Purchase price allocation. The RSP Acquisition has been accounted for as a business combination, using the acquisition method. The following table represents the allocation of the total purchase price of RSP to the identifiable assets acquired and the liabilities assumed based on the fair values at the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded as goodwill. Any value assigned to goodwill is not deductible for income tax purposes.
The following table sets forth the Company’s final purchase price allocation:
(in millions)
 
Total purchase price
$
7,549

 
 
Fair value of liabilities assumed:
 
Accounts payable – trade
$
48

Accrued drilling costs
79

Current derivative instruments
10

Other current liabilities
116

Long-term debt
1,758

Deferred income taxes
515

Asset retirement obligations
20

Noncurrent derivative instruments
5

Total liabilities assumed
$
2,551

 
 
Total purchase price plus liabilities assumed
$
10,100

 
 
Fair value of assets acquired:
 
Accounts receivable
$
194

Current derivative instruments
36

Other current assets
21

Proved oil and natural gas properties
4,055

Unproved oil and natural gas properties
3,565

Other property and equipment
5

Noncurrent derivative instruments
2

Implied goodwill
2,222

Total assets acquired
$
10,100

 
 

Pro forma data. The following unaudited pro forma combined condensed financial data for the three and nine months ended September 30, 2018 was derived from the historical financial statements of the Company giving effect to the RSP Acquisition as if it had occurred on January 1, 2017. The below information reflects pro forma adjustments for the issuance of the Company’s common stock in exchange for RSP’s outstanding shares of common stock, as well as pro forma adjustments based on available information and certain assumptions that the Company believes are reasonable, including (i) the Company’s common stock issued to convert RSP’s outstanding shares of common stock and equity awards as of the closing date of the RSP Acquisition, (ii) the depletion of RSP’s fair-valued proved oil and natural gas properties and (iii) the estimated tax impacts of the pro forma adjustments.
The pro forma results of operations do not include any cost savings or other synergies that may result from the RSP Acquisition. The pro forma financial data does not include the pro forma results of operations for any other acquisitions made during the period. The pro forma combined condensed financial data has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the RSP Acquisition taken place on January 1, 2017 and is not intended to be a projection of future results.
(in millions, except per share amounts)
Three Months Ended
September 30, 2018
 
Nine Months Ended
September 30, 2018
Operating revenues
$
1,243

 
$
3,741

Net income (loss)
$
(133
)
 
$
1,039

Earnings per share:
 
 
 
Basic net income (loss)
$
(0.67
)
 
$
5.19

Diluted net income (loss)
$
(0.67
)
 
$
5.19

 
 
 
 

v3.19.3
Other acquisitions, divestitures and nonmonetary transactions
9 Months Ended
Sep. 30, 2019
Acquisitions, Divestitures, And Non-Monetary Transactions [Abstract]  
Other acquisitions, divestitures and nonmonetary transactions Other acquisitions, divestitures and nonmonetary transactions
During the nine months ended September 30, 2019, the Company entered into the following transaction:
New Mexico Shelf divestiture. On August 29, 2019, the Company entered into a definitive agreement to sell its assets in the New Mexico Shelf for cash proceeds of $925 million, subject to customary closing and post-closing adjustments. In conjunction with the execution of this agreement, the Company received a cash deposit of $93 million from the buyer, which was included in other current liabilities on the consolidated balance sheet at September 30, 2019. The Company determined these assets and liabilities to be held for sale at August 29, 2019 and classified them as current assets and liabilities held for sale on the consolidated balance sheet. Additionally, an impairment charge of $3 million, included in impairments of long-lived assets on the Company's consolidated statements of operations for the three and nine months ended September 30, 2019, was recorded to reduce the carrying value of these assets to their estimated fair value less costs to sell. The total assets held for sale of $930 million relate primarily to oil and natural gas properties, while the total liabilities held for sale of $69 million relate to $59 million of asset retirement obligations and $10 million of revenue payable. This transaction is expected to close in November 2019 and is subject to customary terms and conditions.
During the nine months ended September 30, 2018, the Company closed the following transactions:
February 2018 acquisition and divestiture. In February 2018, the Company closed an acquisition treated as a business combination where it received producing wells along with approximately 21,000 net acres, primarily located in the Midland Basin. As consideration for the non-cash acquisition, the Company divested of certain producing wells and approximately 34,000 net acres located primarily in the northern portion of the Delaware Basin. The business acquired was valued at approximately $755 million as compared to the historical book value of the divested assets of approximately $180 million, which resulted in a non-cash gain of approximately $575 million, included in gain on disposition of assets, net on the Company’s consolidated statement of operations for the nine months ended September 30, 2018.
Delaware Basin divestitures. In January 2018, the Company closed on two asset divestitures of certain non-core assets in Reeves and Ward Counties, Texas, with combined proceeds of approximately $280 million. After direct transaction costs, the Company recorded a pre-tax gain of approximately $134 million, which is included in gain on disposition of assets, net on its consolidated statement of operations for the nine months ended September 30, 2018. The assets divested included proved and unproved oil and natural gas properties on approximately 20,000 net acres.
Nonmonetary transactions. During the nine months ended September 30, 2018, the Company completed multiple nonmonetary transactions. These transactions included exchanges of both proved and unproved oil and natural gas properties. Certain of these transactions were accounted for at fair value and, as a result, the Company recorded pre-tax gains of approximately
$15 million, included in gain on disposition of assets, net on the Company’s consolidated statement of operations for the nine months ended September 30, 2018.
v3.19.3
Stock incentive plan
9 Months Ended
Sep. 30, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock incentive plan Stock incentive plan
On May 16, 2019, the Company’s stockholders approved and adopted the Company’s 2019 Stock Incentive Plan (“the Plan”), which, among other things, increased the total shares authorized for issuance from 10.5 million to 15 million. The Plan provides for granting stock options, restricted stock awards and performance unit awards to directors, officers and employees of the Company. The restricted stock awards vest over a period ranging from one to ten years. The holders of unvested restricted stock awards have voting rights and the right to receive dividends.
In January 2019, the Company granted 212,947 performance unit awards. Included in this grant were 38,952 performance unit awards granted to certain officers, of which 19,476 have a three-year performance period and 19,476 have a five-year performance period. For these 38,952 performance unit awards, at the end of each performance period, each of these performance unit awards will convert into a restricted stock award with the number of shares determined based upon performance criteria, which will then vest at a rate of 20 percent per year commencing on the sixth anniversary of the grant date. All other performance unit awards granted during 2019 will vest at the end of a three-year performance period.
Shares issued as a result of awards granted under the Plan are generally new common shares.
A summary of the Company’s restricted stock shares and performance unit activity under the Plan for the nine months ended September 30, 2019 is presented below:
 
Restricted
Stock Shares
 
Performance
Units
 
Outstanding at December 31, 2018
1,364,699

 
218,391

 
Awards granted (a)
771,789

 
212,947

(b)
Awards canceled / forfeited
(89,998
)
 

 
Lapse of restrictions
(477,303
)
 

 
Outstanding at September 30, 2019
1,569,187

 
431,338

 
 
 
 
 
 
(a) Weighted average grant date fair value per share/unit
$
98.98

 
$
144.03

 
(b) Includes 38,952 performance unit awards granted to certain officers in January 2019 that may convert into shares of restricted stock awards at the end of each performance period that will be subject to additional vesting conditions.

The following table reflects the future stock-based compensation expense to be recorded for all the stock-based compensation awards that were outstanding at September 30, 2019:
(in millions)
 
Remaining 2019
$
22

2020
63

2021
37

2022
13

2023
2

2024
1

Thereafter
2

Total
$
140

 
 

v3.19.3
Disclosures about fair value measurements
9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Disclosures about fair value measurements Disclosures about fair value measurements
The Company uses a valuation framework based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further prioritized into the following fair value input hierarchy:
Level 1:
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:
Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. Level 2 instruments primarily include non-exchange traded derivatives such as over-the-counter commodity price swaps, basis swaps, collars and floors, investments and interest rate swaps. The Company’s valuation models are primarily industry-standard models that consider various inputs including: (i) quoted forward prices for commodities, (ii) time value, (iii) current market and contractual prices for the underlying instruments and (iv) volatility factors, as well as other relevant economic measures.
Level 3:
Prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity). The Company’s valuation models are primarily industry-standard models that consider various inputs including: (i) quoted forward prices for commodities, (ii) time value, (iii) current market and contractual prices for the underlying instruments and (iv) volatility factors, as well as other relevant economic measures.







Financial Assets and Liabilities Measured at Fair Value
The following table presents the carrying amounts and fair values of the Company’s financial instruments at September 30, 2019 and December 31, 2018:
(in millions)
September 30, 2019
 
December 31, 2018
Carrying
Value
Fair
Value
 
Carrying
Value
Fair
Value
 
 
 
 
 
 
Assets:
 
 
 
 
 
Derivative instruments
$
322

$
322

 
$
695

$
695

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
Derivative instruments
$
15

$
15

 
$

$

Credit facility
$
395

$
395

 
$
242

$
242

$600 million 4.375% senior notes due 2025 (a)
$
594

$
622

 
$
594

$
591

$1,000 million 3.75% senior notes due 2027 (a)
$
990

$
1,043

 
$
989

$
939

$1,000 million 4.3% senior notes due 2028 (a)
$
989

$
1,081

 
$
988

$
980

$800 million 4.875% senior notes due 2047 (a)
$
789

$
914

 
$
789

$
761

$600 million 4.85% senior notes due 2048 (a)
$
592

$
689

 
$
592

$
573

 
(a) The carrying value includes associated deferred loan costs and any discount.

Credit facility. The carrying amount of the Company’s credit facility, as amended and restated (the “Credit Facility”), approximates its fair value, as the applicable interest rates are variable and reflective of market rates.
Senior notes. The fair values of the Company’s senior notes are based on quoted market prices. The debt securities are not actively traded and, therefore, are classified as Level 2 in the fair value hierarchy.
Other financial assets and liabilities. The Company has other financial instruments consisting primarily of receivables, payables and other current assets and liabilities. The carrying amounts approximate fair value due to the short maturity of these instruments.
Derivative instruments. The fair value of the Company’s derivative instruments is estimated by management considering various factors, including closing exchange and over-the-counter quotations and the time value of the underlying commitments. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following tables summarize (i) the valuation of each of the Company’s financial instruments by required fair value hierarchy levels and (ii) the gross fair value by the appropriate balance sheet classification, even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company’s consolidated balance sheets at September 30, 2019 and December 31, 2018. The Company nets the fair value of derivative instruments by counterparty in the Company’s consolidated balance sheets.
September 30, 2019
(in millions)
Fair Value Measurements Using
 
 
 
 
 
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
Gross
Amounts
Offset in the
Consolidated
Balance
Sheet
 
Net
Fair Value
Presented
in the
Consolidated
Balance
Sheet
Assets:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives
$

 
$
302

 
$

 
$
302

 
$
(101
)
 
$
201

Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
147

 

 
147

 
(26
)
 
121

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(116
)
 

 
(116
)
 
101

 
(15
)
Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(26
)
 

 
(26
)
 
26

 

 
 
 
 
 
 
 
 
 
 
 
 
Net derivative instruments
$

 
$
307

 
$

 
$
307

 
$

 
$
307

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
Fair Value Measurements Using
 
 
 
 
 
 
(in millions)
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
Gross
Amounts
Offset in the
Consolidated
Balance
Sheet
 
Net
Fair Value
Presented
in the
Consolidated
Balance
Sheet
Assets:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives
$

 
$
543

 
$

 
$
543

 
$
(59
)
 
$
484

Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
243

 

 
243

 
(32
)
 
211

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(59
)
 

 
(59
)
 
59

 

Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(32
)
 

 
(32
)
 
32

 

 
 
 
 
 
 
 
 
 
 
 
 
Net derivative instruments
$

 
$
695

 
$

 
$
695

 
$

 
$
695

 
 
 
 
 
 
 
 
 
 
 
 

Concentrations of credit risk. At September 30, 2019, the Company’s primary concentrations of credit risk are the risk of collecting accounts receivable and the risk of counterparties’ failure to perform under derivative obligations.
The Company has entered into International Swap Dealers Association Master Agreements (“ISDA Agreements”) with each of its derivative counterparties. The terms of the ISDA Agreements provide the Company and the counterparties with rights of set-off upon the occurrence of defined acts of default by either the Company or a counterparty to a derivative, whereby the party not in default may set off all derivative liabilities owed to the defaulting party against all derivative asset receivables from the defaulting party. See Note 7 for additional information regarding the Company’s derivative activities and counterparties.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis 
Certain assets and liabilities are reported at fair value on a nonrecurring basis in the Company’s consolidated balance sheets. The following methods and assumptions were used to estimate the fair values. 
Impairments of long-lived assets. The Company reviews its long-lived assets to be held and used, including proved oil and natural gas properties, whenever events or circumstances indicate that the carrying value of those assets may not be recoverable, for instance when there are declines in commodity prices or well performance. The Company reviews its oil and natural gas properties by depletion base. An impairment loss is indicated if the sum of the expected undiscounted future net cash flows is less than the carrying amount of the assets. If the estimated undiscounted future net cash flows are less than the carrying amount of the Company’s assets, it recognizes an impairment loss for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. At June 30, 2019, the carrying amount of the proved properties of the Company's Yeso field exceeded the expected undiscounted future net cash flows resulting in an impairment charge against earnings of $868 million, reducing the carrying value of the Yeso field to its estimated fair value of $968 million. This impairment charge was included in impairments of long-lived assets on the consolidated statement of operations for the nine months ended September 30, 2019. The impairment charge represented the amount by which the carrying amount exceeded the estimated fair value of the assets and was attributable primarily to certain downward adjustments to the Company's economically recoverable proved oil and natural gas reserves.
The assumptions used in calculating the estimated fair value of the Yeso field at June 30, 2019 are below.
The Company calculates the expected undiscounted future net cash flows of its long-lived assets and their integrated assets using management’s assumptions and expectations of (i) commodity prices, which are based on the NYMEX strip, (ii) pricing adjustments for differentials, (iii) production costs, (iv) capital expenditures, (v) production volumes, (vi) estimated proved reserves and risk-adjusted probable and possible reserves, and (vii) prevailing market rates of income and expenses from integrated assets.
At June 30, 2019, the Company’s estimates of commodity prices for purposes of determining undiscounted future cash flows, which were based on the NYMEX strip, ranged from a 2019 price of $58.32 per barrel of oil decreasing to a 2022 price of $53.58 then rising to a 2026 price of $54.47 per barrel of oil. Natural gas prices ranged from a 2019 price of $2.38 per Mcf of natural gas increasing to a 2026 price of $2.99 per Mcf. Both oil and natural gas commodity prices for this purpose were held flat after 2026.
The Company calculates the estimated fair values of its long-lived assets and their integrated assets using a discounted future cash flow model. Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) recoverable reserves, (ii) production rates, (iii) future operating and development costs, (iv) future commodity prices, and (v) a market-based weighted average cost of capital. The Company utilized a combination of the NYMEX strip pricing and consensus pricing, adjusted for differentials, to value the reserves. These are classified as Level 3 fair value assumptions.
At June 30, 2019, the Company's estimate of commodity prices for purposes of determining discounted future cash flows ranged from a 2019 price of $58.32 per barrel of oil increasing to a 2026 price of $62.06 per barrel of oil. Natural gas prices ranged from a 2019 price of $2.38 per Mcf of natural gas increasing to a 2026 price of $3.00 per Mcf of natural gas. These prices were then adjusted for location and quality differentials. Both oil and natural gas commodity prices for this purpose were inflated by two percent each year after 2026. The expected future net cash flows were discounted using a rate of 10 percent.
Due to the decrease in future commodity prices after June 30, 2019, the Company further impaired the Yeso Field and recorded an impairment charge of $20 million during the three months ended September 30, 2019.
It is reasonably possible that the estimate of undiscounted future net cash flows of the Company’s long-lived assets may change in the future resulting in the need to further impair carrying values. The primary factors that may affect estimates of future cash flows are (i) commodity prices including differentials, (ii) increases or decreases in production and capital costs, (iii) future reserve volume adjustments, both positive and negative, to proved reserves and appropriate risk-adjusted probable and possible reserves, (iv) results of future drilling activities and (v) changes in income and expenses from integrated assets.
Assets held for sale. The Company's Yeso field is primarily composed of the New Mexico Shelf assets that the Company expects to sell in November 2019. The assets and liabilities associated with the pending New Mexico Shelf divestiture were classified as held for sale at August 29, 2019 and were measured at their estimated fair value less cost to sell. The related fair value was based upon anticipated sales proceeds less costs to sell. The anticipated proceeds are equal to the $925 million base purchase price less estimated customary closing and post-closing adjustments. Because the Company's closing and post-closing adjustments, primarily revenues and operating expenses, used to calculate the fair value less costs to sell are estimates that are both significant and unobservable, they are considered Level 3 fair value measurements. Refer to Note 4 for additional information related to the New Mexico Shelf asset divestiture.
v3.19.3
Derivative financial instruments
9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative financial instruments Derivative financial instruments
The Company uses derivative financial instruments to manage its exposure to commodity price fluctuations. Commodity derivative instruments are used to (i) reduce the effect of the volatility of price changes on the oil and natural gas the Company produces and sells, (ii) support the Company’s capital budget and expenditure plans and (iii) support the economics associated with acquisitions. The Company does not enter into derivative financial instruments for speculative or trading purposes. The Company also enters into fixed-price forward physical power purchase contracts to manage the volatility of the price of power needed for ongoing operations. The Company may also enter into physical delivery contracts to effectively provide commodity price hedges. Because these physical contracts are not expected to be net cash settled, the Company has elected normal purchase or normal sale treatment and records these contracts at cost.
The Company does not designate its derivative instruments to qualify for hedge accounting. Accordingly, the Company reflects changes in the fair value of its derivative instruments in its consolidated statements of operations as they occur.
The following table summarizes the amounts reported in earnings related to the commodity derivative instruments for the three and nine months ended September 30, 2019 and 2018:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019
 
2018
 
2019
 
2018
Gain (loss) on derivatives:
 
 
 
 
 
 
 
Oil derivatives
$
355

 
$
(626
)
 
$
(506
)
 
$
(787
)
Natural gas derivatives
42

 
1

 
61

 
(6
)
Total
$
397

 
$
(625
)
 
$
(445
)
 
$
(793
)
 
 
 
 
 
 
 
 
The following table represents the Company’s net cash receipts from (payments on) derivatives for the three and nine months ended September 30, 2019 and 2018:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019
 
2018
 
2019
 
2018
Net cash receipts from (payments on) derivatives:
 
 
 

 
 
 
 
Oil derivatives
$
(21
)
 
$
(46
)
 
$
(72
)
 
$
(245
)
Natural gas derivatives
14

 
2

 
15

 
7

Total
$
(7
)
 
$
(44
)
 
$
(57
)
 
$
(238
)
 
 
 
 
 
 
 
 

Commodity derivative contracts. The following table sets forth the Company’s outstanding derivative contracts at September 30, 2019. When aggregating multiple contracts, the weighted average contract price is disclosed. All of the Company’s derivative contracts at September 30, 2019 are expected to settle by December 31, 2021.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2020
 
 
 
 
Fourth
Quarter
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Total
 
2021
Oil Price Swaps  WTI: (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
13,469

 
12,517

 
11,075

 
10,067

 
9,586

 
43,245

 
13,137

Price per Bbl
 
$
56.46

 
$
57.01

 
$
56.88

 
$
56.93

 
$
57.01

 
$
56.96

 
$
55.33

Oil Price Swaps  Brent: (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
2,178

 
1,456

 
1,456

 
1,472

 
1,472

 
5,856

 

Price per Bbl
 
$
62.08

 
$
60.12

 
$
60.12

 
$
60.12

 
$
60.12

 
$
60.12

 
$

Oil Costless Collars: (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
1,058

 

 

 

 

 

 

Ceiling price per Bbl
 
$
62.95

 
$

 
$

 
$

 
$

 
$

 
$

Floor price per Bbl
 
$
55.43

 
$

 
$

 
$

 
$

 
$

 
$

Oil Basis Swaps: (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
16,053

 
14,651

 
10,647

 
10,580

 
10,120

 
45,998

 
14,600

Price per Bbl
 
$
(2.19
)
 
$
(0.46
)
 
$
(0.65
)
 
$
(0.66
)
 
$
(0.71
)
 
$
(0.60
)
 
$
0.57

Natural Gas Price Swaps  Henry Hub: (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (BBtu)
 
37,750

 
35,024

 
32,313

 
30,038

 
28,498

 
125,873

 
36,500

Price per MMBtu
 
$
2.51

 
$
2.46

 
$
2.46

 
$
2.47

 
$
2.47

 
$
2.47

 
$
2.52

Natural Gas Basis Swaps  Henry Hub/El Paso Permian: (e)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (BBtu)
 
28,820

 
25,770

 
23,960

 
22,080

 
21,770

 
93,580

 
36,500

Price per MMBtu
 
$
(0.76
)
 
$
(1.06
)
 
$
(1.07
)
 
$
(1.07
)
 
$
(1.07
)
 
$
(1.07
)
 
$
(0.66
)
Natural Gas Basis Swaps  Henry Hub/WAHA: (f)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (BBtu)
 
9,200

 
7,280

 
7,280

 
7,360

 
7,360

 
29,280

 
10,950

Price per MMBtu
 
$
(0.77
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(0.66
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) These oil derivative contracts are settled based on the New York Mercantile Exchange (“NYMEX”) – West Texas Intermediate (“WTI”) calendar-month average futures price.
(b) These oil derivative contracts are settled based on the Brent calendar-month average futures price.
(c) The basis differential price is between Midland – WTI and Cushing – WTI. The majority of these contracts are settled on a calendar-month basis, while certain contracts assumed in connection with the RSP acquisition are settled on a trading-month basis.
(d) The natural gas derivative contracts are settled based on the NYMEX – Henry Hub last trading day futures price.
(e) The basis differential price is between NYMEX – Henry Hub and El Paso Permian.
(f) The basis differential price is between NYMEX – Henry Hub and WAHA.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative counterparties.  The Company uses credit and other financial criteria to evaluate the creditworthiness of counterparties to its derivative instruments. The Company believes that all of its derivative counterparties are currently acceptable credit risks. The Company is not required to provide credit support or collateral to any counterparties under its derivative contracts, nor are they required to provide credit support to the Company.
At September 30, 2019, the Company had a net asset position of $307 million as a result of outstanding derivative contracts, which are reflected in the accompanying balance sheets. The Company assessed this balance for concentration risk and noted balances of approximately $79 million, $72 million and $36 million with J.P. Morgan Chase Bank, Wells Fargo Bank N.A. and PNC Bank N.A., respectively.
v3.19.3
Debt
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Debt Debt 
The Company’s debt consisted of the following at September 30, 2019 and December 31, 2018:
(in millions)
September 30,
2019
 
December 31,
2018
Credit facility due 2022
$
395

 
$
242

4.375% unsecured senior notes due 2025 (a)
600

 
600

3.75% unsecured senior notes due 2027
1,000

 
1,000

4.3% unsecured senior notes due 2028
1,000

 
1,000

4.875% unsecured senior notes due 2047
800

 
800

4.85% unsecured senior notes due 2048
600

 
600

Unamortized original issue discount
(10
)
 
(10
)
Senior notes issuance costs, net
(36
)
 
(38
)
Less: current portion

 

Total long-term debt
$
4,349

 
$
4,194

 
(a) For each of the twelve-month periods beginning on January 15, 2020, 2021, 2022, 2023 and thereafter, these notes are
       callable at 103.281%, 102.188%, 101.094% and 100%, respectively.

Credit facility. The Company’s Credit Facility has a maturity date of May 9, 2022. At September 30, 2019, the Company’s commitments from its bank group were $2.0 billion, of which $1.6 billion were unused commitments, net of letters of credit. During the three and nine months ended September 30, 2019, the weighted average interest rates on the Credit Facility were 4.0 percent and 4.3 percent, respectively.  At September 30, 2019, certain of the Company’s 100 percent owned subsidiaries were guarantors under the Credit Facility.
Senior notes. Interest on the Company’s senior notes is paid in arrears semi-annually. The senior notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of the Company’s 100 percent owned subsidiaries, subject to customary release provisions as described in Note 14, and rank equally in right of payments with one another.
At September 30, 2019, the Company was in compliance with the covenants under all of its debt instruments.
Interest expense. The following amounts have been incurred and charged to interest expense for the three and nine months ended September 30, 2019 and 2018:
(in millions)
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
2019
 
2018
 
2019
 
2018
Cash payments for interest
$
57

 
$
16

 
$
166

 
$
76

Non-cash interest
2

 
1

 
5

 
4

Net changes in accruals
(7
)
 
31

 
(15
)
 
28

Interest costs incurred
52

 
48

 
156

 
108

Less: capitalized interest
(6
)
 
(2
)
 
(15
)
 
(5
)
Total interest expense
$
46

 
$
46

 
$
141

 
$
103

 
 
 
 
 
 
 
 

v3.19.3
Commitments and contingencies
9 Months Ended
Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies Commitments and contingencies
Legal actions The Company is a party to proceedings and claims incidental to its business. Assessing contingencies is highly subjective and requires judgment about uncertain future events. When evaluating contingencies related to legal proceedings, the Company may be unable to estimate losses due to a number of factors, including potential defenses, the procedural status of the matter in question, the presence of complex legal and/or factual issues, the ongoing discovery and/or development of information important to the matter. For material matters that the Company believes an unfavorable outcome is reasonably possible, it would disclose the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. The Company does not believe that the loss for any other litigation matters and claims that are reasonably possible to occur will have a material adverse effect on its financial position, results of operations or liquidity. The Company will continue to evaluate proceedings and claims involving the Company on a regular basis and will establish and adjust any estimated accruals as appropriate.
Severance tax, royalty and joint interest audits.  The Company is subject to routine severance, royalty and joint interest audits from regulatory bodies and non-operators and makes accruals as necessary for estimated exposure when deemed probable and estimable. Additionally, the Company is subject to various possible contingencies that arise primarily from interpretations affecting the oil and natural gas industry. Such contingencies include differing interpretations as to the prices at which oil and natural gas sales may be made, the prices at which royalty owners may be paid for production from their leases, allowable costs under joint interest arrangements and other matters. Although the Company believes that it has estimated its exposure with respect to the various laws and regulations, administrative rulings and interpretations thereof, adjustments could be required as new interpretations and regulations are issued.
Commitments.  The Company periodically enters into contractual arrangements under which the Company is committed to expend funds. These contractual arrangements relate to purchase agreements the Company has entered into including water commitment agreements, throughput volume delivery commitments, fixed and variable power commitments, sand commitment agreements and other commitments. The Company’s drilling rig commitments are considered leases under ASU 2016-02 and are included within the tables under the “Leases” section below. The following table summarizes the Company’s commitments at September 30, 2019:
(in millions)
 
Remaining 2019
$
12

2020
62

2021
75

2022
38

2023
35

2024
36

Thereafter
102

Total
$
360

 
 

At September 30, 2019, the Company’s delivery commitments covered the following gross volumes of oil and natural gas:
 
Oil
(MMBbl)
 
Natural Gas
(MMcf)
Remaining 2019
7

 
560

2020
49

 
1,633

2021
51

 
14,112

2022
59

 
16,425

2023
51

 
16,425

2024
47

 
16,470

Thereafter
113

 
32,850

Total
377

 
98,475

 
 
 
 

Leases. The Company leases office space, office equipment, drilling rigs, field equipment and vehicles. Right-of-use assets and lease liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term.
Leased assets may be used in joint operations with other working interest owners. When the Company is the operator in a joint arrangement, the right-of-use assets and lease liabilities are determined on a gross basis. Certain leases contain variable costs above the minimum required payments and are not included in the right-of-use assets or lease liabilities. Options to extend or terminate a lease are included in the lease term when it is reasonably certain the Company will exercise that option. For operating leases, lease cost is recognized on a straight-line basis over the term of the lease. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The Company elected a practical expedient to not separate non-lease components from lease components for the following asset types: office space, office equipment, drilling rigs, and field equipment. The Company did not elect this practical expedient for vehicle leases.
The following table provides supplemental consolidated balance sheet information related to leases at September 30, 2019:
(in millions)
Classification
September 30, 2019
Assets
 
 
Operating lease right-of-use assets
Other property and equipment, net
$
16

Finance lease right-of-use assets
Other property and equipment, net
17

Total lease right-of-use assets (a)
 
$
33

 
 
 
Liabilities
 
 
Current:
 
 
Operating 
Other current liabilities
$
8

Finance 
Other current liabilities
6

Noncurrent:
 
 
Operating 
Asset retirement obligations and other long-term liabilities
11

Finance 
Asset retirement obligations and other long-term liabilities
11

Total lease liabilities (a)
 
$
36

 
 
 
(a) Total lease right-of-use assets and lease liabilities are gross amounts, and a portion of these costs will be reimbursed by other working interest owners.

As of September 30, 2019, the Company had additional operating leases that have not yet commenced. Future undiscounted lease payments of $15 million and estimated lease incentives of $5 million will be included in the determination of the right-of-use asset and lease liability upon lease commencement.
The following table provides the components of lease cost, excluding lease cost related to short-term leases, for the three and nine months ended September 30, 2019:
(in millions)
Classification
Three Months Ended
September 30, 2019
 
Nine Months Ended
September 30, 2019
Operating lease cost
General and administrative
$
2

 
$
6

Finance lease cost
Depreciation, depletion, and amortization (a)
2

 
6

Total lease cost
 
$
4

 
$
12

 
 
 
 
 
(a) Interest on lease liabilities related to finance leases was immaterial during the three and nine months ended September 30, 2019.

The Company’s short-term leases are primarily composed of drilling rigs and certain field equipment. During the three and nine months ended September 30, 2019, the Company’s gross lease costs related to its short-term leases were $64 million and $248 million, respectively, of which $43 million and $174 million, respectively, were capitalized as part of oil and natural gas properties. A portion of these costs was reimbursed to the Company by other working interest owners.
The following table summarizes supplemental cash flow information related to leases for the nine months ended September 30, 2019:
(in millions)
Nine Months Ended September 30, 2019
Cash paid for amounts included in measurement of lease liabilities:
 
Operating cash flows from operating leases
$
6

Financing cash flows from finance leases
$
6

Right-of-use assets obtained in exchange for lease obligations:
 
Operating leases
$
3

Finance leases
$
7

 
 

The following table provides lease terms and discount rates related to leases at September 30, 2019:
 
September 30, 2019
Weighted average remaining lease term (years):
 
Operating leases
3.4

Finance leases
2.9

 
 
Weighted average discount rate (a):
 
Operating leases
4.7
%
Finance leases
4.3
%
 
 
(a) The Company uses the rate implicit in the contract, if readily determinable, or its incremental borrowing rate at the commencement date as the discount rate in determining the present value of the lease payments.

The following table provides maturities of lease liabilities at September 30, 2019:
(in millions)
Operating Leases
 
Finance Leases
Remaining 2019
$
2

 
$
2

2020
8

 
7

2021
7

 
5

2022
2

 
3

2023

 
1

Thereafter
2

 

Total lease payments
21

 
18

Less: interest
(2
)
 
(1
)
Present value of lease liabilities
$
19

 
$
17

 
 
 
 

As discussed in Note 2, the Company elected a transition method to recognize the effects of applying the new standard as a cumulative-effect adjustment to the opening balance of retained earnings. Per ASU 2016-02, an entity electing this transition method should provide the required disclosures under Topic 840 for all periods that continue to be in accordance with Topic 840. As such, the Company included the future minimum lease commitments table below as of December 31, 2018. In addition, lease payments associated with these operating leases were $3 million and $9 million for the three and nine months ended September 30, 2018, respectively. 
Future minimum lease commitments under non-cancellable leases at December 31, 2018 were as follows:
(in millions)
 
2019
$
14

2020
12

2021
10

2022
3

2023

Thereafter
1

Total
$
40

 
 

v3.19.3
Income taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
The Company’s provision for income taxes is based on the estimated annual effective tax rate plus discrete items. For the three months ended September 30, 2019 and 2018, the Company recorded income tax expense of $222 million and an income tax benefit of $69 million, respectively. The change in the income tax provision was primarily due to the pre-tax income for the three months ended September 30, 2019 as compared to the pre-tax loss for the three months ended September 30, 2018. For the nine months ended September 30, 2019 and 2018, the Company recorded an income tax benefit of $25 million and an income tax expense of $225 million, respectively. The change in the income tax provision was primarily due to the pre-tax loss for the nine months ended September 30, 2019 as compared to the pre-tax income for the nine months ended September 30, 2018.
The effective income tax rates were 29 percent and 26 percent for the three months ended September 30, 2019 and 2018, respectively, and 10 percent and 23 percent for the nine months ended September 30, 2019 and 2018, respectively.
At the end of each interim period, we apply a forecasted annualized effective tax rate to the current period income or loss before income taxes, which can produce interim effective tax rate fluctuations. The difference between the Company’s effective tax rates for the three and nine months ended September 30, 2019 as compared to the same periods in 2018 was primarily due to the research and development credit, net of unrecognized tax benefits, recorded in 2019, and the impact of permanent differences between book and taxable income (loss). The lower effective tax rate during 2019 was partially the result of the permanent differences primarily related to the discrete, non-deductible goodwill impairment of $81 million recognized as a result of the pending New Mexico Shelf divestiture.
During the second quarter of 2019, the state of New Mexico enacted a tax law which, among other changes, amended the net operating loss apportioned carryforwards for corporations. As a result of this law change, the Company recorded an estimated deferred state tax benefit of $6 million for the nine months ended September 30, 2019.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based upon the technical merits of the position. At December 31, 2018, the Company had cumulative unrecognized tax benefits of approximately $63 million, primarily related to research and development credits. As of September 30, 2019, the Company estimated an increase in cumulative unrecognized tax benefits for the 2019 tax year of approximately $17 million. If all or a portion of the unrecognized tax benefit is sustained upon examination by the taxing authorities, the tax benefit will be recognized as a reduction to the Company's deferred tax liability and will affect the Company's effective tax rate in the period recognized. The timing as to when the Company will substantially resolve the uncertainties associated with the unrecognized tax benefit is uncertain.
v3.19.3
Related party transactions
9 Months Ended
Sep. 30, 2019
Related Party Transactions [Abstract]  
Related party transactions Related party transactions
The Company paid royalties on certain properties to a partnership in which a director of the Company is the general partner and owns a 3.5 percent limited partnership interest. These payments totaled $2 million for both the three months ended September 30, 2019 and 2018, and $6 million for both the nine months ended September 30, 2019 and 2018.
At September 30, 2019, the Company had ownership interests in entities that operate and manage various infrastructure assets and accounts for these investments using the equity method. The Company made payments to these entities of $9 million and $24 million for the three and nine months ended September 30, 2019, respectively.
v3.19.3
Earnings per share
9 Months Ended
Sep. 30, 2019
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]  
Earnings per share Earnings per share
The Company uses the two-class method of calculating earnings per share because certain of the Company’s unvested share-based awards qualify as participating securities.
The Company’s basic earnings (loss) per share attributable to common stockholders is computed as (i) net income (loss) as reported, (ii) less participating basic earnings (iii) divided by weighted average basic common shares outstanding. The Company’s diluted earnings (loss) per share attributable to common stockholders is computed as (i) basic earnings (loss) attributable to common stockholders, (ii) plus reallocation of participating earnings (iii) divided by weighted average diluted common shares outstanding.
The following table reconciles the Company’s earnings (loss) from operations and earnings (loss) attributable to common stockholders to the basic and diluted earnings (loss) used to determine the Company’s earnings (loss) per share amounts for the three and nine months ended September 30, 2019 and 2018 under the two-class method:

Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019

2018
 
2019
 
2018
Net income (loss) as reported
$
558


$
(199
)
 
$
(234
)
 
$
773

Participating basic earnings (a)
(4
)


 
(1
)
 
(6
)
Basic earnings (loss) attributable to common stockholders
554


(199
)
 
(235
)
 
767

Reallocation of participating earnings



 

 

Diluted earnings (loss) attributable to common stockholders
$
554


$
(199
)
 
$
(235
)
 
$
767

 
 
 
 
 
 
 
 
(a) Unvested restricted stock awards represent participating securities because they participate in nonforfeitable dividends or distributions with the common equity holders of the Company. Participating earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unvested restricted stock awards do not participate in undistributed net losses as they are not contractually obligated to do so.

The following table is a reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three and nine months ended September 30, 2019 and 2018:

Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in thousands)
2019

2018
 
2019
 
2018
Weighted average common shares outstanding:



 
 
 
 
Basic
199,448


188,953

 
199,272

 
161,605

Dilutive performance units
6



 

 
342

Diluted
199,454


188,953

 
199,272

 
161,947

 
 
 
 
 
 
 
 

The following table is a summary of the performance units that were not included in the computation of diluted earnings per share, as inclusion of these items would be antidilutive:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in thousands)
2019
 
2018
 
2019
 
2018
Number of antidilutive units:
 
 
 
 
 
 
 
Performance units
324

 
359

 
431

 
110

 
 
 
 
 
 
 
 

Performance unit awards. The number of shares of common stock that will ultimately be issued for performance units will be determined by a combination of (i) comparing the Company’s total stockholder return relative to the total stockholder return of a predetermined group of peer companies at the end of the performance period and (ii) the Company’s absolute total stockholder return at the end of the performance period. The performance period on these awards can range from three to five years. The actual payout of shares will be between zero and 300 percent. See Note 5 for additional information on performance unit awards.
v3.19.3
Stockholders' equity
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Stockholders' equity Stockholders' equityCommon stock dividends. The Company paid dividends of $25 million, or $0.125 per share, and $75 million, or $0.375 per share, during the three and nine months ended September 30, 2019, respectively.
v3.19.3
Subsidiary guarantors
9 Months Ended
Sep. 30, 2019
Guarantees [Abstract]  
Subsidiary guarantors Subsidiary guarantors
At September 30, 2019, certain of the Company’s 100 percent owned subsidiaries have fully and unconditionally guaranteed the Company’s senior notes. The indentures governing the Company’s senior notes provide that the guarantees of its subsidiary guarantors will be released in certain customary circumstances including (i) in connection with any sale, exchange or other disposition, whether by merger, consolidation or otherwise, of the capital stock of that guarantor to a person that is not the Company or a restricted subsidiary of the Company, such that, after giving effect to such transaction, such guarantor would no longer constitute a subsidiary of the Company, (ii) in connection with any sale, exchange or other disposition (other than a lease) of all or substantially all of the assets of that guarantor to a person that is not the Company or a restricted subsidiary of the Company, (iii) upon the merger of a guarantor into the Company or any other guarantor or the liquidation or dissolution of a guarantor, (iv) if the Company designates any restricted subsidiary that is a guarantor to be an unrestricted subsidiary in accordance with the indenture, (v) upon legal defeasance or satisfaction and discharge of the indenture and (vi) upon written notice of such release or discharge by the Company to the trustee following the release or discharge of all guarantees by such guarantor of any indebtedness that resulted in the creation of such guarantee, except a discharge or release by or as a result of payment under such guarantee.
See Note 8 for a summary of the Company’s senior notes. In accordance with practices accepted by the SEC, the Company has prepared condensed consolidating financial statements in order to quantify the assets, results of operations and cash flows of such subsidiaries as subsidiary guarantors. In addition, certain of the Company’s subsidiaries do not guarantee the Company’s senior notes and are included in the Company’s consolidated financial statements. These entities are 100 percent owned subsidiaries and are referred to as a “Subsidiary Non-Guarantor” in the tables below.
The following condensed consolidating balance sheets at September 30, 2019 and December 31, 2018, condensed consolidating statements of operations for the three and nine months ended September 30, 2019 and 2018 and condensed consolidating statements of cash flows for the nine months ended September 30, 2019 and 2018, present financial information for Concho Resources Inc. as the parent on a stand-alone basis (carrying any investments in subsidiaries under the equity method), financial information for the subsidiary guarantors on a stand-alone basis (carrying any investment in non-guarantor subsidiaries under the equity method), financial information for the subsidiary non-guarantors on a stand-alone basis and the consolidation and elimination entries necessary to arrive at the information for the Company on a consolidated basis. All current and deferred income taxes are recorded on Concho Resources Inc., as the subsidiaries are flow-through entities for income tax purposes. The subsidiary guarantors and subsidiary non-guarantors are not restricted from making distributions to the Company.
Condensed Consolidating Balance Sheet
September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
Accounts receivable - related parties
$
18,133

 
$

 
$

 
$
(18,133
)
 
$

Other current assets
208

 
1,809

 

 

 
2,017

Oil and natural gas properties, net

 
21,004

 
16

 

 
21,020

Property and equipment, net

 
408

 

 

 
408

Investment in subsidiaries
5,741

 

 

 
(5,741
)
 

Goodwill

 
2,141

 

 

 
2,141

Other long-term assets
134

 
412

 

 

 
546

Total assets
$
24,216

 
$
25,774

 
$
16

 
$
(23,874
)
 
$
26,132

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Accounts payable - related parties
$

 
$
18,117

 
$
16

 
$
(18,133
)
 
$

Other current liabilities
86

 
1,254

 

 

 
1,340

Long-term debt
4,349

 

 

 

 
4,349

Other long-term liabilities
1,270

 
662

 

 

 
1,932

Equity
18,511

 
5,741

 

 
(5,741
)
 
18,511

Total liabilities and equity
$
24,216

 
$
25,774

 
$
16

 
$
(23,874
)
 
$
26,132

 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Balance Sheet
December 31, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
Accounts receivable - related parties
$
18,155

 
$

 
$

 
$
(18,155
)
 
$

Other current assets
534

 
875

 

 

 
1,409

Oil and natural gas properties, net

 
21,988

 
17

 

 
22,005

Property and equipment, net

 
308

 

 

 
308

Investment in subsidiaries
5,411

 

 

 
(5,411
)
 

Goodwill

 
2,224

 

 

 
2,224

Other long-term assets
224

 
124

 

 

 
348

Total assets
$
24,324

 
$
25,519

 
$
17

 
$
(23,566
)
 
$
26,294

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Accounts payable - related parties
$

 
$
18,138

 
$
17

 
$
(18,155
)
 
$

Other current liabilities
70

 
1,286

 

 

 
1,356

Long-term debt
4,194

 

 

 

 
4,194

Other long-term liabilities
1,292

 
684

 

 

 
1,976

Equity
18,768

 
5,411

 

 
(5,411
)
 
18,768

Total liabilities and equity
$
24,324

 
$
25,519

 
$
17

 
$
(23,566
)
 
$
26,294

 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
1,115

 
$

 
$

 
$
1,115

Total operating costs and expenses
395

 
(688
)
 

 

 
(293
)
Income from operations
395

 
427

 

 

 
822

Interest expense
(46
)
 

 

 

 
(46
)
Other, net
431

 
4

 

 
(431
)
 
4

Income before income taxes
780

 
431

 

 
(431
)
 
780

Income tax expense
(222
)
 

 

 

 
(222
)
Net income
$
558

 
$
431

 
$

 
$
(431
)
 
$
558

 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
1,192

 
$

 
$

 
$
1,192

Total operating costs and expenses
(626
)
 
(791
)
 

 

 
(1,417
)
Income (loss) from operations
(626
)
 
401

 

 

 
(225
)
Interest expense
(46
)
 

 

 

 
(46
)
Other, net
404

 
3

 

 
(404
)
 
3

Income (loss) before income taxes
(268
)
 
404

 

 
(404
)
 
(268
)
Income tax benefit
69

 

 

 

 
69

Net income (loss)
$
(199
)
 
$
404

 
$

 
$
(404
)
 
$
(199
)
 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
3,346

 
$

 
$

 
$
3,346

Total operating costs and expenses
(448
)
 
(3,327
)
 

 

 
(3,775
)
Income (loss) from operations
(448
)
 
19

 

 

 
(429
)
Interest expense
(141
)
 

 

 

 
(141
)
Other, net
330

 
311

 

 
(330
)
 
311

Income (loss) before income taxes
(259
)
 
330

 

 
(330
)
 
(259
)
Income tax benefit
25

 

 

 

 
25

Net income (loss)
$
(234
)
 
$
330

 
$

 
$
(330
)
 
$
(234
)
 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
3,079

 
$
5

 
$

 
$
3,084

Total operating costs and expenses
(794
)
 
(1,294
)
 
(3
)
 

 
(2,091
)
Income (loss) from operations
(794
)
 
1,785

 
2

 

 
993

Interest expense
(103
)
 

 

 

 
(103
)
Other, net
1,895

 
108

 

 
(1,895
)
 
108

Income before income taxes
998

 
1,893

 
2

 
(1,895
)
 
998

Income tax expense
(225
)
 

 

 

 
(225
)
Net income
$
773

 
$
1,893

 
$
2

 
$
(1,895
)
 
$
773

 
 
 
 
 
 
 
 
 
 


Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Net cash flows provided by (used in) operating activities
$
(63
)
 
$
2,130

 
$

 
$

 
$
2,067

Net cash flows used in investing activities

 
(2,020
)
 

 

 
(2,020
)
Net cash flows provided by (used in) financing activities
63

 
(110
)
 

 

 
(47
)
Net change in cash and cash equivalents

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

 

 

Cash and cash equivalents at end of period
$

 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Net cash flows provided by operating activities
$
386

 
$
1,475

 
$

 
$

 
$
1,861

Net cash flows used in investing activities

 
(1,422
)
 

 

 
(1,422
)
Net cash flows used in financing activities
(386
)
 
(29
)
 

 

 
(415
)
Net increase in cash and cash equivalents

 
24

 

 

 
24

Cash and cash equivalents at beginning of period

 

 

 

 

Cash and cash equivalents at end of period
$

 
$
24

 
$

 
$

 
$
24

 
 
 
 
 
 
 
 
 
 

v3.19.3
Subsequent events
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent events Subsequent events
2019 dividends. On October 29, 2019, the Company’s board of directors approved a cash dividend of $0.125 per share for the fourth quarter of 2019 that is expected to be paid on December 20, 2019 to stockholders of record as of November 8, 2019.
New commodity derivative contracts.  After September 30, 2019, the Company entered into the following derivative contracts to hedge additional amounts of estimated future production:
 
 
 
 
 
2021
Oil Price Swaps  WTI: (a)
 
 
Volume (MBbl)
 
4,380

Price per Bbl
 
$
51.21

Oil Basis Swaps: (b)
 
 
Volume (MBbl)
 
2,190

Price per Bbl
 
$
0.84

 
 
 
 
 
 
(a) These oil derivative contracts are settled based on the NYMEX – WTI calendar-month average futures price.
(b) The basis differential price is between Midland – WTI and Cushing – WTI. These contracts are settled on a calendar-month basis.
 
 
 

v3.19.3
Supplementary information
9 Months Ended
Sep. 30, 2019
Oil and Gas Exploration and Production Industries Disclosures [Abstract]  
Supplementary information Supplementary information

Capitalized costs
(in millions)
September 30,
2019
 
December 31,
2018
Oil and natural gas properties:
 
 
 
Proved
$
22,080

 
$
24,992

Unproved
6,417

 
6,714

Less: accumulated depletion
(7,477
)
 
(9,701
)
Net capitalized costs for oil and natural gas properties (a)
$
21,020

 
$
22,005

 
 
 
 
(a) Excludes $930 million of net capitalized costs related to the New Mexico Shelf assets that were classified as held for sale as of September 30, 2019.

Costs incurred for oil and natural gas producing activities

Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019

2018
 
2019
 
2018
Property acquisition costs:



 
 
 
 
Proved
$


$
4,126

 
$

 
$
4,126

Unproved
20


3,578

 
33

 
3,596

Exploration (a)
412


481

 
1,309

 
1,059

Development (a)
258


280

 
1,072

 
653

Total costs incurred for oil and natural gas properties
$
690


$
8,465

 
$
2,414

 
$
9,434

 
 
 
 
 
 
 
 
(a) Asset retirement obligations included in the Company's costs incurred for oil and natural gas producing activities were $13 million and $1 million for the three months ended September 30, 2019 and 2018, respectively, and $16 million and $2 million for the nine months ended September 30, 2019 and 2018, respectively. Asset retirement obligations for the three and nine months ended September 30, 2019 were primarily the result of revised estimated future abandonment costs.

v3.19.3
Basis of presentation and summary of significant accounting policies (Policies)
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Principles of consolidation
Principles of consolidation. The consolidated financial statements of the Company include the accounts of the Company and its 100 percent owned subsidiaries. The Company consolidates the financial statements of these entities. All material intercompany balances and transactions have been eliminated.
Reclassifications
Reclassifications. Certain prior period amounts have been reclassified to conform to the 2019 presentation. These reclassifications had no impact on net income (loss), total assets, liabilities and stockholders’ equity or total cash flows.
Use of estimates in the preparation of financial statements
Use of estimates in the preparation of financial statements. Preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Depletion of oil and natural gas properties is determined using estimates of proved oil and natural gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved oil and natural gas reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and natural gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves, commodity price outlooks and prevailing market rates of other sources of income and costs. Other significant estimates include, but are not limited to, asset retirement obligations, goodwill, fair value of stock-based compensation, fair value of business combinations, fair value of nonmonetary transactions, fair value of derivative financial instruments and income taxes.
Assets held for sale
Assets held for sale. On August 29, 2019, the Company entered into a definitive agreement to sell its New Mexico Shelf assets and has reflected the related assets and liabilities as held for sale in the consolidated balance sheet at September 30, 2019. Refer to Note 4 for further information regarding the Company’s pending sale of its New Mexico Shelf assets.
On the date at which the Company determined the asset group met all of the held for sale criteria, the Company discontinued the recording of depletion and depreciation of the asset or asset group to be sold and reclassified it as held for sale in the accompanying consolidated balance sheets. These assets held for sale were measured at the fair value less cost to sell.
Interim financial statements
Interim financial statements. The accompanying consolidated financial statements of the Company have not been audited by the Company’s independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2018 is derived from audited consolidated financial statements. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments necessary to present fairly the Company’s consolidated financial statements. All such adjustments are of a normal, recurring nature. In preparing the accompanying consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.
Certain disclosures have been condensed in or omitted from these consolidated financial statements. Accordingly, these condensed notes to the consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s 2018 Form 10-K.
Equity method investments
Equity method investments. The Company holds membership interests in certain entities and accounts for these investments using the equity method of accounting.
The Company owns a 50 percent membership interest in Beta Holding Company, LLC, a midstream joint venture formed to construct a crude oil gathering system in the Midland Basin.
The Company owns a 20 percent membership interest in Solaris Midstream Holdings, LLC, an entity that owns and operates water gathering, transportation, disposal, recycling and storage infrastructure assets in the Permian Basin.
The Company owns a preferred membership interest in WaterBridge Operating LLC, an entity that operates and manages various water infrastructure assets located in the Permian Basin.
The Company includes its equity method investment balance in other assets on the consolidated balance sheets. The Company records its share of equity investment earnings and losses in other income (expense) on the consolidated statements of operations.
Litigation contingencies Litigation contingencies. The Company is a party to proceedings and claims incidental to its business. In each reporting period, the Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its consolidated financial statements. The amount of any resulting losses may differ from these estimates. An accrual is recorded for a material loss contingency when its occurrence is probable and damages are reasonably estimable.
Revenue recognition
Revenue recognition. The Company recognizes revenues from the sales of oil and natural gas to its customers and presents them disaggregated on the Company’s consolidated statements of operations. All revenues are recognized in the geographical region of the Permian Basin.
The Company enters into contracts with customers to sell its oil and natural gas production. Revenue on these contracts is recognized in accordance with the five-step revenue recognition model prescribed in Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” (“ASC 606”). Specifically, revenue is recognized when the Company’s performance obligations under these contracts are satisfied, which generally occurs with the transfer of control of the oil and natural gas to the purchaser. Control is generally considered transferred when the following criteria are met: (i) transfer of physical custody, (ii) transfer of title, (iii) transfer of risk of loss and (iv) relinquishment of any repurchase rights or other similar rights. Given the nature of the products sold, revenue is recognized at a point in time based on the amount of consideration the Company expects to receive in accordance with the price specified in the contract. Consideration under the oil and natural gas marketing contracts is typically received from the purchaser one to two months after production. At September 30, 2019 and December 31, 2018, the Company had receivables related to contracts with customers of $535 million and $466 million, respectively.
Oil Contracts. The majority of the Company’s oil marketing contracts transfer physical custody and title at or near the wellhead, which is generally when control of the oil has been transferred to the purchaser. The majority of the oil produced is sold under contracts using market-based pricing which is then adjusted for differentials based upon delivery location and oil quality. To the extent the differentials are incurred after the transfer of control of the oil, the differentials are included in oil sales on the consolidated statements of operations as they represent part of the transaction price of the contract. If the differentials, or other related costs, are incurred prior to the transfer of control of the oil, those costs are included in gathering, processing and transportation on the Company’s consolidated statements of operations and are accounted for as costs incurred directly and not netted from the transaction price.
Natural Gas Contracts. The majority of the Company’s natural gas is sold at the lease location, which is generally when control of the natural gas has been transferred to the purchaser. The natural gas is sold under (i) percentage of proceeds processing contracts, (ii) fee-based contracts or (iii) a hybrid of percentage of proceeds and fee-based contracts. Under the majority of the Company’s contracts, the purchaser gathers the natural gas in the field where it is produced and transports it via pipeline to natural gas processing plants where natural gas liquid products are extracted. The natural gas liquid products and remaining residue gas are then sold by the purchaser. Under the percentage of proceeds and hybrid percentage of proceeds and fee-based contracts, the Company receives a percentage of the value for the extracted liquids and the residue gas. Under the fee-based contracts, the Company receives natural gas liquids and residue gas value, less the fee component, or is invoiced the fee component. To the
extent control of the natural gas transfers upstream of the transportation and processing activities, revenue is recognized as the net amount received from the purchaser. To the extent that control transfers downstream of those activities, revenue is recognized on a gross basis, and the related costs are classified in gathering, processing and transportation on the Company’s consolidated statements of operations.
The Company does not disclose the value of unsatisfied performance obligations under its contracts with customers as it applies the practical exemption in accordance with ASC 606. The exemption, as described in ASC 606-10-50-14(a), applies to variable consideration that is recognized as control of the product is transferred to the customer. Since each unit of product represents a separate performance obligation, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.
General and administrative expense General and administrative expense. The Company receives fees for the operation of jointly-owned oil and natural gas properties during the drilling and production phases and records such reimbursements as reductions to general and administrative expense.
Goodwill
Goodwill. Goodwill is assessed for impairment on an annual basis, or more frequently if indicators of impairment exist. Impairment tests, which involve the use of estimates related to the fair market value of the business operations with which goodwill is associated, are performed as of July 1 of each year. The balance of goodwill is allocated in its entirety to the Company’s one reporting unit. The reporting unit’s fair value is the Company’s enterprise value calculated as the combined market capitalization of the Company’s equity, which includes a control premium, plus the fair value of the Company’s long-term debt. If the results of the quantitative test are such that the fair value of the reporting unit is less than the carrying value, goodwill is then reduced by an amount that is equal to the amount by which the carrying value of the reporting unit exceeds the fair value.
Recently adopted accounting pronouncements and new accounting pronouncements issued but not yet adopted
Recently adopted accounting pronouncements.  In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires all leases with a term greater than one year to be recognized on the consolidated balance sheet while maintaining similar classifications for finance and operating leases. Lease expense recognition on the consolidated statements of operations was effectively unchanged. The Company adopted this guidance on January 1, 2019. The Company made policy elections not to capitalize short-term leases for all asset classes and not to separate non-lease components from lease components for all asset classes except for vehicles. The Company also did not elect the package of practical expedients that allowed for certain considerations under the original “Leases (Topic 840)” accounting standard (“Topic 840”) to be carried forward upon adoption of ASU 2016-02.
In January 2018, the FASB issued ASU No. 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” which provides an optional practical expedient not to evaluate land easements that existed or expired before the adoption of ASU 2016-02 and that were not previously accounted for as leases under Topic 840. The Company enters into land easements on a routine basis
as part of its ongoing operations and has many such agreements currently in place; however, the Company did not account for any land easements under Topic 840. As this guidance serves as an amendment to ASU 2016-02, the Company elected this practical expedient, which became effective upon the date of adoption of ASU 2016-02. The Company will assess any new land easements to determine whether the arrangement should be accounted for as a lease. In July 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements,” which provides a transition election not to restate comparative periods for the effects of applying the new lease standard. This transition election permits entities to change the date of initial application to the beginning of the year of adoption and to recognize the effects of applying the new standard as a cumulative-effect adjustment to the opening balance of retained earnings. The Company elected this transition approach, however the cumulative impact of adoption in the opening balance of retained earnings as of January 1, 2019 was zero.
The Company enters into lease agreements to support its operations. These agreements are for leases on assets such as office space, vehicles, field equipment and drilling rigs. Upon adoption, the Company recognized $35 million of right-of-use assets, of which $19 million and $16 million relate to the Company’s operating and finance leases, respectively, and $37 million of associated lease liabilities. See Note 9 for additional disclosures of the Company’s leases.
In August 2018, the Securities and Exchange Commission (“SEC”) issued a final rule that amends certain of its disclosure requirements that have become redundant, duplicative, overlapping, outdated or superseded, in light of other disclosure requirements, U.S. GAAP or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The final rule amends numerous SEC rules, items and forms covering a diverse group of topics, including, but not limited to, changes in stockholders’ equity. The final rule extends the annual disclosure requirement in SEC Regulation S-X, Rule 3-04, of presenting changes in stockholders’ equity to interim periods. Registrants are required to analyze changes in stockholders’ equity in the form of a reconciliation for the current quarter and year-to-date interim periods and comparative periods in the prior year. As a result, the Company updated its presentation of the consolidated statements of stockholders’ equity to include comparative periods in the prior year. In addition, the final rule requires the presentation of dividends per share to be disclosed in the statement of stockholders’ equity.
New accounting pronouncements issued but not yet adopted. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“Topic 326”), which replaces the current “incurred loss” methodology for recognizing credit losses with an “expected loss” methodology. This new methodology requires that a financial asset measured at amortized cost be presented at the net amount expected to be collected. This standard is intended to provide more timely decision-useful information about the expected credit losses on financial instruments. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments–Credit Losses,” which makes amendments to clarify the scope of the guidance, including the amendment clarifying that receivables arising from operating leases are not within the scope of Topic 326. This guidance is effective for fiscal years beginning after December 15, 2019, and early adoption is allowed as early as fiscal years beginning after December 15, 2018. The Company is currently reviewing the potentially impacted financial assets and is developing an internal model for measuring the expected credit losses for those balances. The Company does not believe this new guidance will have a material impact on its consolidated financial statements.
In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”), which, among other things, clarifies that (i) certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account, (ii) adds unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 and (iii) requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and early adoption is permitted. The amendments in this update should be applied retrospectively to the date of initial application of Topic 606. An entity should recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings of the later of the earliest annual period presented and the annual period that includes the date of the entity’s initial application of Topic 606. The Company does not believe this new guidance will have a material impact on its consolidated financial statements.
v3.19.3
RSP Acquisition (Tables)
9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
Purchase Price Allocation
The following table sets forth the Company’s final purchase price allocation:
(in millions)
 
Total purchase price
$
7,549

 
 
Fair value of liabilities assumed:
 
Accounts payable – trade
$
48

Accrued drilling costs
79

Current derivative instruments
10

Other current liabilities
116

Long-term debt
1,758

Deferred income taxes
515

Asset retirement obligations
20

Noncurrent derivative instruments
5

Total liabilities assumed
$
2,551

 
 
Total purchase price plus liabilities assumed
$
10,100

 
 
Fair value of assets acquired:
 
Accounts receivable
$
194

Current derivative instruments
36

Other current assets
21

Proved oil and natural gas properties
4,055

Unproved oil and natural gas properties
3,565

Other property and equipment
5

Noncurrent derivative instruments
2

Implied goodwill
2,222

Total assets acquired
$
10,100

 
 

Schedule of Pro Forma Information
(in millions, except per share amounts)
Three Months Ended
September 30, 2018
 
Nine Months Ended
September 30, 2018
Operating revenues
$
1,243

 
$
3,741

Net income (loss)
$
(133
)
 
$
1,039

Earnings per share:
 
 
 
Basic net income (loss)
$
(0.67
)
 
$
5.19

Diluted net income (loss)
$
(0.67
)
 
$
5.19

 
 
 
 

v3.19.3
Stock incentive plan (Tables)
9 Months Ended
Sep. 30, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Summary of restricted stock shares and performance unit activity
A summary of the Company’s restricted stock shares and performance unit activity under the Plan for the nine months ended September 30, 2019 is presented below:
 
Restricted
Stock Shares
 
Performance
Units
 
Outstanding at December 31, 2018
1,364,699

 
218,391

 
Awards granted (a)
771,789

 
212,947

(b)
Awards canceled / forfeited
(89,998
)
 

 
Lapse of restrictions
(477,303
)
 

 
Outstanding at September 30, 2019
1,569,187

 
431,338

 
 
 
 
 
 
(a) Weighted average grant date fair value per share/unit
$
98.98

 
$
144.03

 
(b) Includes 38,952 performance unit awards granted to certain officers in January 2019 that may convert into shares of restricted stock awards at the end of each performance period that will be subject to additional vesting conditions.

Future stock-based compensation expense to be recorded for all the stock-based compensation awards that were outstanding
The following table reflects the future stock-based compensation expense to be recorded for all the stock-based compensation awards that were outstanding at September 30, 2019:
(in millions)
 
Remaining 2019
$
22

2020
63

2021
37

2022
13

2023
2

2024
1

Thereafter
2

Total
$
140

 
 

v3.19.3
Disclosures about fair value measurements (Tables)
9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Carrying amounts and fair values of the Company's financial instruments
The following table presents the carrying amounts and fair values of the Company’s financial instruments at September 30, 2019 and December 31, 2018:
(in millions)
September 30, 2019
 
December 31, 2018
Carrying
Value
Fair
Value
 
Carrying
Value
Fair
Value
 
 
 
 
 
 
Assets:
 
 
 
 
 
Derivative instruments
$
322

$
322

 
$
695

$
695

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
Derivative instruments
$
15

$
15

 
$

$

Credit facility
$
395

$
395

 
$
242

$
242

$600 million 4.375% senior notes due 2025 (a)
$
594

$
622

 
$
594

$
591

$1,000 million 3.75% senior notes due 2027 (a)
$
990

$
1,043

 
$
989

$
939

$1,000 million 4.3% senior notes due 2028 (a)
$
989

$
1,081

 
$
988

$
980

$800 million 4.875% senior notes due 2047 (a)
$
789

$
914

 
$
789

$
761

$600 million 4.85% senior notes due 2048 (a)
$
592

$
689

 
$
592

$
573

 
(a) The carrying value includes associated deferred loan costs and any discount.

Net basis derivative fair values as reported in the consolidated balance sheets The following tables summarize (i) the valuation of each of the Company’s financial instruments by required fair value hierarchy levels and (ii) the gross fair value by the appropriate balance sheet classification, even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company’s consolidated balance sheets at September 30, 2019 and December 31, 2018. The Company nets the fair value of derivative instruments by counterparty in the Company’s consolidated balance sheets.
September 30, 2019
(in millions)
Fair Value Measurements Using
 
 
 
 
 
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
Gross
Amounts
Offset in the
Consolidated
Balance
Sheet
 
Net
Fair Value
Presented
in the
Consolidated
Balance
Sheet
Assets:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives
$

 
$
302

 
$

 
$
302

 
$
(101
)
 
$
201

Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
147

 

 
147

 
(26
)
 
121

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(116
)
 

 
(116
)
 
101

 
(15
)
Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(26
)
 

 
(26
)
 
26

 

 
 
 
 
 
 
 
 
 
 
 
 
Net derivative instruments
$

 
$
307

 
$

 
$
307

 
$

 
$
307

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
Fair Value Measurements Using
 
 
 
 
 
 
(in millions)
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
Gross
Amounts
Offset in the
Consolidated
Balance
Sheet
 
Net
Fair Value
Presented
in the
Consolidated
Balance
Sheet
Assets:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives
$

 
$
543

 
$

 
$
543

 
$
(59
)
 
$
484

Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
243

 

 
243

 
(32
)
 
211

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(59
)
 

 
(59
)
 
59

 

Noncurrent:
 
 
 
 
 
 
 
 
 
 
 
Commodity derivatives

 
(32
)
 

 
(32
)
 
32

 

 
 
 
 
 
 
 
 
 
 
 
 
Net derivative instruments
$

 
$
695

 
$

 
$
695

 
$

 
$
695

 
 
 
 
 
 
 
 
 
 
 
 

v3.19.3
Derivative financial instruments (Tables)
9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of the gains and losses reported in earnings related to the commodity derivative instruments
The following table summarizes the amounts reported in earnings related to the commodity derivative instruments for the three and nine months ended September 30, 2019 and 2018:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019
 
2018
 
2019
 
2018
Gain (loss) on derivatives:
 
 
 
 
 
 
 
Oil derivatives
$
355

 
$
(626
)
 
$
(506
)
 
$
(787
)
Natural gas derivatives
42

 
1

 
61

 
(6
)
Total
$
397

 
$
(625
)
 
$
(445
)
 
$
(793
)
 
 
 
 
 
 
 
 
The following table represents the Company’s net cash receipts from (payments on) derivatives for the three and nine months ended September 30, 2019 and 2018:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019
 
2018
 
2019
 
2018
Net cash receipts from (payments on) derivatives:
 
 
 

 
 
 
 
Oil derivatives
$
(21
)
 
$
(46
)
 
$
(72
)
 
$
(245
)
Natural gas derivatives
14

 
2

 
15

 
7

Total
$
(7
)
 
$
(44
)
 
$
(57
)
 
$
(238
)
 
 
 
 
 
 
 
 

Company's outstanding derivative contracts The following table sets forth the Company’s outstanding derivative contracts at September 30, 2019. When aggregating multiple contracts, the weighted average contract price is disclosed. All of the Company’s derivative contracts at September 30, 2019 are expected to settle by December 31, 2021.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2020
 
 
 
 
Fourth
Quarter
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Total
 
2021
Oil Price Swaps  WTI: (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
13,469

 
12,517

 
11,075

 
10,067

 
9,586

 
43,245

 
13,137

Price per Bbl
 
$
56.46

 
$
57.01

 
$
56.88

 
$
56.93

 
$
57.01

 
$
56.96

 
$
55.33

Oil Price Swaps  Brent: (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
2,178

 
1,456

 
1,456

 
1,472

 
1,472

 
5,856

 

Price per Bbl
 
$
62.08

 
$
60.12

 
$
60.12

 
$
60.12

 
$
60.12

 
$
60.12

 
$

Oil Costless Collars: (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
1,058

 

 

 

 

 

 

Ceiling price per Bbl
 
$
62.95

 
$

 
$

 
$

 
$

 
$

 
$

Floor price per Bbl
 
$
55.43

 
$

 
$

 
$

 
$

 
$

 
$

Oil Basis Swaps: (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (MBbl)
 
16,053

 
14,651

 
10,647

 
10,580

 
10,120

 
45,998

 
14,600

Price per Bbl
 
$
(2.19
)
 
$
(0.46
)
 
$
(0.65
)
 
$
(0.66
)
 
$
(0.71
)
 
$
(0.60
)
 
$
0.57

Natural Gas Price Swaps  Henry Hub: (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (BBtu)
 
37,750

 
35,024

 
32,313

 
30,038

 
28,498

 
125,873

 
36,500

Price per MMBtu
 
$
2.51

 
$
2.46

 
$
2.46

 
$
2.47

 
$
2.47

 
$
2.47

 
$
2.52

Natural Gas Basis Swaps  Henry Hub/El Paso Permian: (e)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (BBtu)
 
28,820

 
25,770

 
23,960

 
22,080

 
21,770

 
93,580

 
36,500

Price per MMBtu
 
$
(0.76
)
 
$
(1.06
)
 
$
(1.07
)
 
$
(1.07
)
 
$
(1.07
)
 
$
(1.07
)
 
$
(0.66
)
Natural Gas Basis Swaps  Henry Hub/WAHA: (f)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume (BBtu)
 
9,200

 
7,280

 
7,280

 
7,360

 
7,360

 
29,280

 
10,950

Price per MMBtu
 
$
(0.77
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(1.10
)
 
$
(0.66
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) These oil derivative contracts are settled based on the New York Mercantile Exchange (“NYMEX”) – West Texas Intermediate (“WTI”) calendar-month average futures price.
(b) These oil derivative contracts are settled based on the Brent calendar-month average futures price.
(c) The basis differential price is between Midland – WTI and Cushing – WTI. The majority of these contracts are settled on a calendar-month basis, while certain contracts assumed in connection with the RSP acquisition are settled on a trading-month basis.
(d) The natural gas derivative contracts are settled based on the NYMEX – Henry Hub last trading day futures price.
(e) The basis differential price is between NYMEX – Henry Hub and El Paso Permian.
(f) The basis differential price is between NYMEX – Henry Hub and WAHA.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
v3.19.3
Debt (Tables)
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Company's debt
The Company’s debt consisted of the following at September 30, 2019 and December 31, 2018:
(in millions)
September 30,
2019
 
December 31,
2018
Credit facility due 2022
$
395

 
$
242

4.375% unsecured senior notes due 2025 (a)
600

 
600

3.75% unsecured senior notes due 2027
1,000

 
1,000

4.3% unsecured senior notes due 2028
1,000

 
1,000

4.875% unsecured senior notes due 2047
800

 
800

4.85% unsecured senior notes due 2048
600

 
600

Unamortized original issue discount
(10
)
 
(10
)
Senior notes issuance costs, net
(36
)
 
(38
)
Less: current portion

 

Total long-term debt
$
4,349

 
$
4,194

 
(a) For each of the twelve-month periods beginning on January 15, 2020, 2021, 2022, 2023 and thereafter, these notes are
       callable at 103.281%, 102.188%, 101.094% and 100%, respectively.

Interest expense The following amounts have been incurred and charged to interest expense for the three and nine months ended September 30, 2019 and 2018:
(in millions)
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
2019
 
2018
 
2019
 
2018
Cash payments for interest
$
57

 
$
16

 
$
166

 
$
76

Non-cash interest
2

 
1

 
5

 
4

Net changes in accruals
(7
)
 
31

 
(15
)
 
28

Interest costs incurred
52

 
48

 
156

 
108

Less: capitalized interest
(6
)
 
(2
)
 
(15
)
 
(5
)
Total interest expense
$
46

 
$
46

 
$
141

 
$
103

 
 
 
 
 
 
 
 

v3.19.3
Commitments and contingencies (Tables)
9 Months Ended
Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Summary of the Company's future commitments The following table summarizes the Company’s commitments at September 30, 2019:
(in millions)
 
Remaining 2019
$
12

2020
62

2021
75

2022
38

2023
35

2024
36

Thereafter
102

Total
$
360

 
 

Oil and natural gas delivery commitments
At September 30, 2019, the Company’s delivery commitments covered the following gross volumes of oil and natural gas:
 
Oil
(MMBbl)
 
Natural Gas
(MMcf)
Remaining 2019
7

 
560

2020
49

 
1,633

2021
51

 
14,112

2022
59

 
16,425

2023
51

 
16,425

2024
47

 
16,470

Thereafter
113

 
32,850

Total
377

 
98,475

 
 
 
 

Supplemental balance sheet information related to leases
The following table provides supplemental consolidated balance sheet information related to leases at September 30, 2019:
(in millions)
Classification
September 30, 2019
Assets
 
 
Operating lease right-of-use assets
Other property and equipment, net
$
16

Finance lease right-of-use assets
Other property and equipment, net
17

Total lease right-of-use assets (a)
 
$
33

 
 
 
Liabilities
 
 
Current:
 
 
Operating 
Other current liabilities
$
8

Finance 
Other current liabilities
6

Noncurrent:
 
 
Operating 
Asset retirement obligations and other long-term liabilities
11

Finance 
Asset retirement obligations and other long-term liabilities
11

Total lease liabilities (a)
 
$
36

 
 
 
(a) Total lease right-of-use assets and lease liabilities are gross amounts, and a portion of these costs will be reimbursed by other working interest owners.

Components of lease expense
The following table provides the components of lease cost, excluding lease cost related to short-term leases, for the three and nine months ended September 30, 2019:
(in millions)
Classification
Three Months Ended
September 30, 2019
 
Nine Months Ended
September 30, 2019
Operating lease cost
General and administrative
$
2

 
$
6

Finance lease cost
Depreciation, depletion, and amortization (a)
2

 
6

Total lease cost
 
$
4

 
$
12

 
 
 
 
 
(a) Interest on lease liabilities related to finance leases was immaterial during the three and nine months ended September 30, 2019.

Supplemental cash flow information related to leases
The following table summarizes supplemental cash flow information related to leases for the nine months ended September 30, 2019:
(in millions)
Nine Months Ended September 30, 2019
Cash paid for amounts included in measurement of lease liabilities:
 
Operating cash flows from operating leases
$
6

Financing cash flows from finance leases
$
6

Right-of-use assets obtained in exchange for lease obligations:
 
Operating leases
$
3

Finance leases
$
7

 
 

Lease terms and discount rates related to leases
The following table provides lease terms and discount rates related to leases at September 30, 2019:
 
September 30, 2019
Weighted average remaining lease term (years):
 
Operating leases
3.4

Finance leases
2.9

 
 
Weighted average discount rate (a):
 
Operating leases
4.7
%
Finance leases
4.3
%
 
 
(a) The Company uses the rate implicit in the contract, if readily determinable, or its incremental borrowing rate at the commencement date as the discount rate in determining the present value of the lease payments.

Maturity and present value of lease liabilities
The following table provides maturities of lease liabilities at September 30, 2019:
(in millions)
Operating Leases
 
Finance Leases
Remaining 2019
$
2

 
$
2

2020
8

 
7

2021
7

 
5

2022
2

 
3

2023

 
1

Thereafter
2

 

Total lease payments
21

 
18

Less: interest
(2
)
 
(1
)
Present value of lease liabilities
$
19

 
$
17

 
 
 
 

Future minimum lease commitments under non-cancellable operating leases
Future minimum lease commitments under non-cancellable leases at December 31, 2018 were as follows:
(in millions)
 
2019
$
14

2020
12

2021
10

2022
3

2023

Thereafter
1

Total
$
40

 
 

v3.19.3
Earnings per share (Tables)
9 Months Ended
Sep. 30, 2019
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]  
Reconciliation of earnings attributable to common shares, basic and diluted
The following table reconciles the Company’s earnings (loss) from operations and earnings (loss) attributable to common stockholders to the basic and diluted earnings (loss) used to determine the Company’s earnings (loss) per share amounts for the three and nine months ended September 30, 2019 and 2018 under the two-class method:

Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019

2018
 
2019
 
2018
Net income (loss) as reported
$
558


$
(199
)
 
$
(234
)
 
$
773

Participating basic earnings (a)
(4
)


 
(1
)
 
(6
)
Basic earnings (loss) attributable to common stockholders
554


(199
)
 
(235
)
 
767

Reallocation of participating earnings



 

 

Diluted earnings (loss) attributable to common stockholders
$
554


$
(199
)
 
$
(235
)
 
$
767

 
 
 
 
 
 
 
 
(a) Unvested restricted stock awards represent participating securities because they participate in nonforfeitable dividends or distributions with the common equity holders of the Company. Participating earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unvested restricted stock awards do not participate in undistributed net losses as they are not contractually obligated to do so.

Reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding
The following table is a reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three and nine months ended September 30, 2019 and 2018:

Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in thousands)
2019

2018
 
2019
 
2018
Weighted average common shares outstanding:



 
 
 
 
Basic
199,448


188,953

 
199,272

 
161,605

Dilutive performance units
6



 

 
342

Diluted
199,454


188,953

 
199,272

 
161,947

 
 
 
 
 
 
 
 

Summary of the performance units that were not included in the computation of diluted net income per share
The following table is a summary of the performance units that were not included in the computation of diluted earnings per share, as inclusion of these items would be antidilutive:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in thousands)
2019
 
2018
 
2019
 
2018
Number of antidilutive units:
 
 
 
 
 
 
 
Performance units
324

 
359

 
431

 
110

 
 
 
 
 
 
 
 

v3.19.3
Subsidiary guarantors (Tables)
9 Months Ended
Sep. 30, 2019
Guarantees [Abstract]  
Condensed Consolidating Balance Sheet
The following condensed consolidating balance sheets at September 30, 2019 and December 31, 2018, condensed consolidating statements of operations for the three and nine months ended September 30, 2019 and 2018 and condensed consolidating statements of cash flows for the nine months ended September 30, 2019 and 2018, present financial information for Concho Resources Inc. as the parent on a stand-alone basis (carrying any investments in subsidiaries under the equity method), financial information for the subsidiary guarantors on a stand-alone basis (carrying any investment in non-guarantor subsidiaries under the equity method), financial information for the subsidiary non-guarantors on a stand-alone basis and the consolidation and elimination entries necessary to arrive at the information for the Company on a consolidated basis. All current and deferred income taxes are recorded on Concho Resources Inc., as the subsidiaries are flow-through entities for income tax purposes. The subsidiary guarantors and subsidiary non-guarantors are not restricted from making distributions to the Company.
Condensed Consolidating Balance Sheet
September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
Accounts receivable - related parties
$
18,133

 
$

 
$

 
$
(18,133
)
 
$

Other current assets
208

 
1,809

 

 

 
2,017

Oil and natural gas properties, net

 
21,004

 
16

 

 
21,020

Property and equipment, net

 
408

 

 

 
408

Investment in subsidiaries
5,741

 

 

 
(5,741
)
 

Goodwill

 
2,141

 

 

 
2,141

Other long-term assets
134

 
412

 

 

 
546

Total assets
$
24,216

 
$
25,774

 
$
16

 
$
(23,874
)
 
$
26,132

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Accounts payable - related parties
$

 
$
18,117

 
$
16

 
$
(18,133
)
 
$

Other current liabilities
86

 
1,254

 

 

 
1,340

Long-term debt
4,349

 

 

 

 
4,349

Other long-term liabilities
1,270

 
662

 

 

 
1,932

Equity
18,511

 
5,741

 

 
(5,741
)
 
18,511

Total liabilities and equity
$
24,216

 
$
25,774

 
$
16

 
$
(23,874
)
 
$
26,132

 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Balance Sheet
December 31, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
Accounts receivable - related parties
$
18,155

 
$

 
$

 
$
(18,155
)
 
$

Other current assets
534

 
875

 

 

 
1,409

Oil and natural gas properties, net

 
21,988

 
17

 

 
22,005

Property and equipment, net

 
308

 

 

 
308

Investment in subsidiaries
5,411

 

 

 
(5,411
)
 

Goodwill

 
2,224

 

 

 
2,224

Other long-term assets
224

 
124

 

 

 
348

Total assets
$
24,324

 
$
25,519

 
$
17

 
$
(23,566
)
 
$
26,294

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Accounts payable - related parties
$

 
$
18,138

 
$
17

 
$
(18,155
)
 
$

Other current liabilities
70

 
1,286

 

 

 
1,356

Long-term debt
4,194

 

 

 

 
4,194

Other long-term liabilities
1,292

 
684

 

 

 
1,976

Equity
18,768

 
5,411

 

 
(5,411
)
 
18,768

Total liabilities and equity
$
24,324

 
$
25,519

 
$
17

 
$
(23,566
)
 
$
26,294

 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
1,115

 
$

 
$

 
$
1,115

Total operating costs and expenses
395

 
(688
)
 

 

 
(293
)
Income from operations
395

 
427

 

 

 
822

Interest expense
(46
)
 

 

 

 
(46
)
Other, net
431

 
4

 

 
(431
)
 
4

Income before income taxes
780

 
431

 

 
(431
)
 
780

Income tax expense
(222
)
 

 

 

 
(222
)
Net income
$
558

 
$
431

 
$

 
$
(431
)
 
$
558

 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
1,192

 
$

 
$

 
$
1,192

Total operating costs and expenses
(626
)
 
(791
)
 

 

 
(1,417
)
Income (loss) from operations
(626
)
 
401

 

 

 
(225
)
Interest expense
(46
)
 

 

 

 
(46
)
Other, net
404

 
3

 

 
(404
)
 
3

Income (loss) before income taxes
(268
)
 
404

 

 
(404
)
 
(268
)
Income tax benefit
69

 

 

 

 
69

Net income (loss)
$
(199
)
 
$
404

 
$

 
$
(404
)
 
$
(199
)
 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
3,346

 
$

 
$

 
$
3,346

Total operating costs and expenses
(448
)
 
(3,327
)
 

 

 
(3,775
)
Income (loss) from operations
(448
)
 
19

 

 

 
(429
)
Interest expense
(141
)
 

 

 

 
(141
)
Other, net
330

 
311

 

 
(330
)
 
311

Income (loss) before income taxes
(259
)
 
330

 

 
(330
)
 
(259
)
Income tax benefit
25

 

 

 

 
25

Net income (loss)
$
(234
)
 
$
330

 
$

 
$
(330
)
 
$
(234
)
 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Total operating revenues
$

 
$
3,079

 
$
5

 
$

 
$
3,084

Total operating costs and expenses
(794
)
 
(1,294
)
 
(3
)
 

 
(2,091
)
Income (loss) from operations
(794
)
 
1,785

 
2

 

 
993

Interest expense
(103
)
 

 

 

 
(103
)
Other, net
1,895

 
108

 

 
(1,895
)
 
108

Income before income taxes
998

 
1,893

 
2

 
(1,895
)
 
998

Income tax expense
(225
)
 

 

 

 
(225
)
Net income
$
773

 
$
1,893

 
$
2

 
$
(1,895
)
 
$
773

 
 
 
 
 
 
 
 
 
 


Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2019
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Net cash flows provided by (used in) operating activities
$
(63
)
 
$
2,130

 
$

 
$

 
$
2,067

Net cash flows used in investing activities

 
(2,020
)
 

 

 
(2,020
)
Net cash flows provided by (used in) financing activities
63

 
(110
)
 

 

 
(47
)
Net change in cash and cash equivalents

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

 

 

Cash and cash equivalents at end of period
$

 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 

Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2018
(in millions)
Parent
Issuer
 
Subsidiary
Guarantors
 
Subsidiary
Non-Guarantor
 
Consolidating
Entries
 
Total
Net cash flows provided by operating activities
$
386

 
$
1,475

 
$

 
$

 
$
1,861

Net cash flows used in investing activities

 
(1,422
)
 

 

 
(1,422
)
Net cash flows used in financing activities
(386
)
 
(29
)
 

 

 
(415
)
Net increase in cash and cash equivalents

 
24

 

 

 
24

Cash and cash equivalents at beginning of period

 

 

 

 

Cash and cash equivalents at end of period
$

 
$
24

 
$

 
$

 
$
24

 
 
 
 
 
 
 
 
 
 

v3.19.3
Subsequent events (Tables)
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
New commodity derivative contracts After September 30, 2019, the Company entered into the following derivative contracts to hedge additional amounts of estimated future production:
 
 
 
 
 
2021
Oil Price Swaps  WTI: (a)
 
 
Volume (MBbl)
 
4,380

Price per Bbl
 
$
51.21

Oil Basis Swaps: (b)
 
 
Volume (MBbl)
 
2,190

Price per Bbl
 
$
0.84

 
 
 
 
 
 
(a) These oil derivative contracts are settled based on the NYMEX – WTI calendar-month average futures price.
(b) The basis differential price is between Midland – WTI and Cushing – WTI. These contracts are settled on a calendar-month basis.
 
 
 

v3.19.3
Supplementary information (Tables)
9 Months Ended
Sep. 30, 2019
Oil and Gas Exploration and Production Industries Disclosures [Abstract]  
Capitalized costs

Capitalized costs
(in millions)
September 30,
2019
 
December 31,
2018
Oil and natural gas properties:
 
 
 
Proved
$
22,080

 
$
24,992

Unproved
6,417

 
6,714

Less: accumulated depletion
(7,477
)
 
(9,701
)
Net capitalized costs for oil and natural gas properties (a)
$
21,020

 
$
22,005

 
 
 
 
(a) Excludes $930 million of net capitalized costs related to the New Mexico Shelf assets that were classified as held for sale as of September 30, 2019.

Costs incurred for oil and natural gas producing activities
Costs incurred for oil and natural gas producing activities

Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2019

2018
 
2019
 
2018
Property acquisition costs:



 
 
 
 
Proved
$


$
4,126

 
$

 
$
4,126

Unproved
20


3,578

 
33

 
3,596

Exploration (a)
412


481

 
1,309

 
1,059

Development (a)
258


280

 
1,072

 
653

Total costs incurred for oil and natural gas properties
$
690


$
8,465

 
$
2,414

 
$
9,434

 
 
 
 
 
 
 
 
(a) Asset retirement obligations included in the Company's costs incurred for oil and natural gas producing activities were $13 million and $1 million for the three months ended September 30, 2019 and 2018, respectively, and $16 million and $2 million for the nine months ended September 30, 2019 and 2018, respectively. Asset retirement obligations for the three and nine months ended September 30, 2019 were primarily the result of revised estimated future abandonment costs.

v3.19.3
Basis of presentation and summary of significant accounting policies (Narrative) (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
May 31, 2019
Feb. 28, 2018
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Aug. 29, 2019
Jan. 01, 2019
Dec. 31, 2018
Significant Accounting Policies Disclosure [Line Items]                  
Income (loss) from equity method investments         $ 15,000,000 $ 5,000,000      
Gain on disposition of assets, net     $ 303,000,000 $ (5,000,000) 303,000,000 719,000,000      
Distribution from equity method investment         0 148,000,000      
Proceeds from the disposition of assets         393,000,000 260,000,000      
Receivables related to contracts with customers     535,000,000   535,000,000       $ 466,000,000
Fees related to operation of jointly owned oil and natural gas properties     5,000,000 $ 4,000,000 13,000,000 $ 13,000,000      
Goodwill     2,141,000,000   2,141,000,000       $ 2,224,000,000
Right of use asset     33,000,000   33,000,000        
Right of use asset, operating leases     16,000,000   16,000,000        
Right of use asset, finance leases     17,000,000   17,000,000        
Lease liabilities     36,000,000   36,000,000        
Disposal Group, Disposed of by Sale, Not Discontinued Operations                  
Significant Accounting Policies Disclosure [Line Items]                  
Gain on disposition of assets, net     $ 299,000,000   299,000,000        
Accounting Standards Update 2018-01                  
Significant Accounting Policies Disclosure [Line Items]                  
Cumulative effect adjustment               $ 0  
Accounting Standards Update 2016-02                  
Significant Accounting Policies Disclosure [Line Items]                  
Right of use asset               35,000,000  
Right of use asset, operating leases               19,000,000  
Right of use asset, finance leases               16,000,000  
Lease liabilities               $ 37,000,000  
Oryx Southern Delaware Holdings                  
Significant Accounting Policies Disclosure [Line Items]                  
Income (loss) from equity method investments   $ 9,000,000              
Total distribution from equity method investment   157,000,000              
Portion of equity method investment distribution that offset Company's net investment   54,000,000              
Distribution from equity method investment   45,000,000              
Remaining distribution from equity method investment   103,000,000              
Proceeds from the disposition of assets         $ 289,000,000        
Oryx Southern Delaware Holdings | Disposal Group, Disposed of by Sale, Not Discontinued Operations                  
Significant Accounting Policies Disclosure [Line Items]                  
Equity method investment ownership percentage 23.75%                
Percentage of interest sold 100.00%                
Oryx Southern Delaware Holdings | Loans Payable                  
Significant Accounting Policies Disclosure [Line Items]                  
Face amount of debt   $ 800,000,000              
Beta Holding Equity Method Investment                  
Significant Accounting Policies Disclosure [Line Items]                  
Equity method investment ownership percentage     50.00%   50.00%        
Solaris Midstream Holdings                  
Significant Accounting Policies Disclosure [Line Items]                  
Equity method investment ownership percentage     20.00%   20.00%        
New Mexico Shelf Divestiture                  
Significant Accounting Policies Disclosure [Line Items]                  
Goodwill, disposal group             $ 81,000,000    
v3.19.3
RSP Acquisition (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jul. 19, 2018
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Business Acquisition [Line Items]          
Acquisition related costs   $ 0 $ 23 $ 1 $ 39
RSP Permian          
Business Acquisition [Line Items]          
Consideration paid $ 7,549        
Acquisition related costs     $ 23   $ 33
v3.19.3
RSP Acquisition (Purchase Price Allocation) (Details) - USD ($)
$ in Millions
Jul. 19, 2018
Sep. 30, 2019
Dec. 31, 2018
Fair value of assets acquired:      
Implied goodwill   $ 2,141 $ 2,224
RSP Permian      
Business Acquisition [Line Items]      
Total purchase price $ 7,549    
Fair value of liabilities assumed:      
Accounts payable – trade 48    
Accrued drilling costs 79    
Current derivative instruments 10    
Other current liabilities 116    
Long-term debt 1,758    
Deferred income taxes 515    
Asset retirement obligations 20    
Noncurrent derivative instruments 5    
Total liabilities assumed 2,551    
Fair value of assets acquired:      
Accounts receivable 194    
Current derivative instruments 36    
Other current assets 21    
Proved oil and natural gas properties 4,055    
Unproved oil and natural gas properties 3,565    
Other property and equipment 5    
Noncurrent derivative instruments 2    
Implied goodwill 2,222    
Total assets acquired $ 10,100    
v3.19.3
RSP Acquisition (Schedule Of Pro Forma Information) (Details) - RSP Permian - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2018
Business Acquisition [Line Items]    
Operating revenues $ 1,243 $ 3,741
Net income (loss) $ (133) $ 1,039
Earnings per share:    
Basic net income (loss) (in dollars per share) $ (0.67) $ 5.19
Diluted net income (loss) (in dollars per share) $ (0.67) $ 5.19
v3.19.3
Other acquisitions, divestitures and nonmonetary transactions (Narrative) (Details)
a in Thousands, $ in Millions
1 Months Ended 3 Months Ended 9 Months Ended
Nov. 30, 2019
USD ($)
Aug. 31, 2019
USD ($)
Feb. 28, 2018
USD ($)
a
Jan. 31, 2018
USD ($)
a
Sep. 30, 2019
USD ($)
Sep. 30, 2018
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2018
USD ($)
Dec. 31, 2018
USD ($)
Business Acquisition [Line Items]                  
Cash deposit received             $ 93 $ 0  
Revenue payable         $ 220   220   $ 253
Pre-tax gain (loss)         303 $ (5) 303 719  
Assets held for sale         930   930   0
Liabilities held for sale         69   69   $ 0
February 2018 Acquisition Divestiture                  
Business Acquisition [Line Items]                  
Net acreage | a     21            
Fair value of acquired assets     $ 755            
Book value of divested assets     $ 180            
Pre-tax gain (loss)               575  
February 2018 Acquisition Divestiture | Disposal group                  
Business Acquisition [Line Items]                  
Net acreage | a     34            
Delaware Basin                  
Business Acquisition [Line Items]                  
Net proceeds from divestiture       $ 280          
Net acreage | a       20          
Pre-tax gain (loss)               134  
Nonmonetary Transactions                  
Business Acquisition [Line Items]                  
Pre-tax gain (loss)               $ 15  
New Mexico Shelf Divestiture                  
Business Acquisition [Line Items]                  
Cash deposit received   $ 93              
Impairments of long-lived assets         3   3    
Asset retirement obligation         59   59    
Revenue payable         $ 10   $ 10    
Scenario, Forecast | New Mexico Shelf Divestiture                  
Business Acquisition [Line Items]                  
Net proceeds from divestiture $ 925                
v3.19.3
Stock incentive plan (Narrative) (Details) - shares
1 Months Ended 9 Months Ended
Jan. 31, 2019
Sep. 30, 2019
May 16, 2019
May 15, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares authorized     15,000,000 10,500,000
Restricted Stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards granted (in shares)   771,789    
Performance Shares        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards granted (in shares) 212,947 212,947    
Performance Shares | Officer        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards granted (in shares) 38,952      
Performance Shares | Three Year Vesting Period | Officer        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period   3 years    
Awards granted (in shares) 19,476      
Vesting percentage 20.00%      
Performance Shares | Five Year Vesting Period | Officer        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period   5 years    
Awards granted (in shares) 19,476      
Vesting percentage 20.00%      
Other Performance Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period   3 years    
Minimum | Restricted Stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period   1 year    
Maximum | Restricted Stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period   10 years    
v3.19.3
Stock incentive plan (Summary Of Restricted Stock Shares and Performance Unit Activity) (Details) - $ / shares
1 Months Ended 9 Months Ended
Jan. 31, 2019
Sep. 30, 2019
Restricted Stock    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Outstanding at beginning of period (in shares) 1,364,699 1,364,699
Awards granted (in shares)   771,789
Awards canceled / forfeited (in shares)   (89,998)
Lapse of restrictions (in shares)   (477,303)
Outstanding at end of period (in shares)   1,569,187
Awards granted - weighted average grant date fair value per share / unit (in dollars per share)   $ 98.98
Performance Shares    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Outstanding at beginning of period (in shares) 218,391 218,391
Awards granted (in shares) 212,947 212,947
Awards canceled / forfeited (in shares)   0
Lapse of restrictions (in shares)   0
Outstanding at end of period (in shares)   431,338
Awards granted - weighted average grant date fair value per share / unit (in dollars per share)   $ 144.03
Officer | Performance Shares    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Awards granted (in shares) 38,952  
v3.19.3
Stock incentive plan (Summary For Future Stock-Based Compensation Expense) (Details) - 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]        
Non-cash stock-based compensation $ 20 $ 23 $ 67 $ 58
Remaining 2019 And Thereafter        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     140  
Remaining 2019        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     22  
2020        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     63  
2021        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     37  
2022        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     13  
2023        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     2  
2024        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     1  
Thereafter        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Non-cash stock-based compensation     $ 2  
v3.19.3
Disclosures about fair value measurements (Carrying Amounts And Fair Values Of The Company's Financial Instruments) (Details) - USD ($)
9 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Fair Value Measurement [Domain] | 4.375% senior notes due 2025    
Debt Instrument, Fair Value Disclosure [Abstract]    
Interest rate 4.375%  
Debt maturity year 2025  
Fair Value Measurement [Domain] | 3.75% senior notes due 2027    
Debt Instrument, Fair Value Disclosure [Abstract]    
Interest rate 3.75%  
Debt maturity year 2027  
Fair Value Measurement [Domain] | 4.3% senior notes due 2028    
Debt Instrument, Fair Value Disclosure [Abstract]    
Interest rate 4.30%  
Debt maturity year 2028  
Fair Value Measurement [Domain] | 4.875% senior notes due 2047    
Debt Instrument, Fair Value Disclosure [Abstract]    
Interest rate 4.875%  
Debt maturity year 2047  
Fair Value Measurement [Domain] | 4.85% senior notes due 2048    
Debt Instrument, Fair Value Disclosure [Abstract]    
Interest rate 4.85%  
Debt maturity year 2048  
Credit facility $ 395,000,000 $ 242,000,000
4.375% senior notes due 2025    
Debt Instrument, Fair Value Disclosure [Abstract]    
Face amount of debt $ 600,000,000  
Interest rate 4.375% 4.375%
Debt maturity year 2025  
3.75% senior notes due 2027    
Debt Instrument, Fair Value Disclosure [Abstract]    
Face amount of debt $ 1,000,000,000  
Interest rate 3.75% 3.75%
Debt maturity year 2027  
4.3% senior notes due 2028    
Debt Instrument, Fair Value Disclosure [Abstract]    
Face amount of debt $ 1,000,000,000  
Interest rate 4.30% 4.30%
Debt maturity year 2028  
4.875% senior notes due 2047    
Debt Instrument, Fair Value Disclosure [Abstract]    
Face amount of debt $ 800,000,000  
Interest rate 4.875% 4.875%
Debt maturity year 2047  
4.85% senior notes due 2048    
Debt Instrument, Fair Value Disclosure [Abstract]    
Face amount of debt $ 600,000,000  
Interest rate 4.85% 4.85%
Debt maturity year 2048  
Carrying Value    
Derivative Instruments, Assets [Abstract]    
Derivative instruments, assets $ 322,000,000 $ 695,000,000
Derivative Instruments, Liabilities [Abstract]    
Derivative instruments, liabilities 15,000,000 0
Debt Instrument, Fair Value Disclosure [Abstract]    
Credit facility 395,000,000 242,000,000
Carrying Value | 4.375% senior notes due 2025    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 594,000,000 594,000,000
Carrying Value | 3.75% senior notes due 2027    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 990,000,000 989,000,000
Carrying Value | 4.3% senior notes due 2028    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 989,000,000 988,000,000
Carrying Value | 4.875% senior notes due 2047    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 789,000,000 789,000,000
Carrying Value | 4.85% senior notes due 2048    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 592,000,000 592,000,000
Fair Value    
Derivative Instruments, Assets [Abstract]    
Derivative instruments, assets 322,000,000 695,000,000
Derivative Instruments, Liabilities [Abstract]    
Derivative instruments, liabilities 15,000,000 0
Debt Instrument, Fair Value Disclosure [Abstract]    
Credit facility 395,000,000 242,000,000
Fair Value | 4.375% senior notes due 2025    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 622,000,000 591,000,000
Fair Value | 3.75% senior notes due 2027    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 1,043,000,000 939,000,000
Fair Value | 4.3% senior notes due 2028    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 1,081,000,000 980,000,000
Fair Value | 4.875% senior notes due 2047    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes 914,000,000 761,000,000
Fair Value | 4.85% senior notes due 2048    
Debt Instrument, Fair Value Disclosure [Abstract]    
Senior notes $ 689,000,000 $ 573,000,000
v3.19.3
Disclosures about fair value measurements (Company's Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Liabilities:    
Net derivative instruments $ 307 $ 695
Commodity Derivative | Derivative Asset Current    
Assets:    
Derivative asset, fair value, gross asset 302 543
Derivative asset, fair value, gross liability (101) (59)
Derivative asset, fair value, amount not offset against collateral 201 484
Commodity Derivative | Derivative Asset Noncurrent    
Assets:    
Derivative asset, fair value, gross asset 147 243
Derivative asset, fair value, gross liability (26) (32)
Derivative asset, fair value, amount not offset against collateral 121 211
Commodity Derivative | Derivative Liability Current    
Liabilities:    
Derivative liability, fair value, gross liability (116) (59)
Derivative liability, fair value, gross asset 101 59
Derivative liability, fair value, amount not offset against collateral (15) 0
Commodity Derivative | Derivative Liability Noncurrent    
Liabilities:    
Derivative liability, fair value, gross liability (26) (32)
Derivative liability, fair value, gross asset 26 32
Derivative liability, fair value, amount not offset against collateral 0 0
Fair Value, Inputs, Level 1    
Liabilities:    
Net derivative instruments 0 0
Fair Value, Inputs, Level 1 | Commodity Derivative | Derivative Asset Current    
Assets:    
Derivative asset, fair value, gross asset 0 0
Fair Value, Inputs, Level 1 | Commodity Derivative | Derivative Asset Noncurrent    
Assets:    
Derivative asset, fair value, gross asset 0 0
Fair Value, Inputs, Level 1 | Commodity Derivative | Derivative Liability Current    
Liabilities:    
Derivative liability, fair value, gross liability 0 0
Fair Value, Inputs, Level 1 | Commodity Derivative | Derivative Liability Noncurrent    
Liabilities:    
Derivative liability, fair value, gross liability 0 0
Fair Value, Inputs, Level 2    
Liabilities:    
Net derivative instruments   695
Fair Value, Inputs, Level 2 | Commodity Derivative | Derivative Asset Current    
Assets:    
Derivative asset, fair value, gross asset 302 543
Fair Value, Inputs, Level 2 | Commodity Derivative | Derivative Asset Noncurrent    
Assets:    
Derivative asset, fair value, gross asset 147 243
Fair Value, Inputs, Level 2 | Commodity Derivative | Derivative Liability Current    
Liabilities:    
Derivative liability, fair value, gross liability (116) (59)
Fair Value, Inputs, Level 2 | Commodity Derivative | Derivative Liability Noncurrent    
Liabilities:    
Derivative liability, fair value, gross liability (26) (32)
Fair Value, Inputs, Level 3    
Liabilities:    
Net derivative instruments 0 0
Fair Value, Inputs, Level 3 | Commodity Derivative | Derivative Asset Current    
Assets:    
Derivative asset, fair value, gross asset 0 0
Fair Value, Inputs, Level 3 | Commodity Derivative | Derivative Asset Noncurrent    
Assets:    
Derivative asset, fair value, gross asset 0 0
Fair Value, Inputs, Level 3 | Commodity Derivative | Derivative Liability Current    
Liabilities:    
Derivative liability, fair value, gross liability 0 0
Fair Value, Inputs, Level 3 | Commodity Derivative | Derivative Liability Noncurrent    
Liabilities:    
Derivative liability, fair value, gross liability $ 0 $ 0
v3.19.3
Disclosures about fair value measurements Disclosures about fair value measurements (Narrative) (Details)
$ in Millions
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Nov. 30, 2019
USD ($)
Sep. 30, 2019
USD ($)
Jun. 30, 2019
USD ($)
Sep. 30, 2018
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2018
USD ($)
Dec. 31, 2026
$ / Mcf
$ / bbl
Dec. 31, 2022
$ / bbl
Dec. 31, 2019
$ / Mcf
$ / bbl
Fair Value Measurement Inputs and Valuation Techniques [Line Items]                  
Impairments of long-lived assets   $ 101 $ 868 $ 0 $ 969 $ 0      
Fair value of long-lived asset     $ 968            
Inflation rate estimate     2.00%            
Annual discount rate     10.00%            
Scenario, Forecast | Valuation Technique, Undiscounted Cash Flow                  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]                  
Management estimates of future oil price (in dollars per unit) | $ / bbl             54.47 53.58 58.32
Management estimates of future natural gas price (in dollars per unit) | $ / Mcf             2.99   2.38
Scenario, Forecast | Valuation Technique, Discounted Cash Flow                  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]                  
Management estimates of future oil price (in dollars per unit) | $ / bbl             62.06   58.32
Management estimates of future natural gas price (in dollars per unit) | $ / Mcf             3.00   2.38
Yeso Field                  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]                  
Impairments of long-lived assets   $ 20              
New Mexico Shelf Divestiture | Scenario, Forecast                  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]                  
Net proceeds from divestiture $ 925                
v3.19.3
Derivative financial instruments (Summary Of The Gains And Losses Reported In Earnings Related To The Commodity Derivative Instruments) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Derivative Financial Instruments Gains And Losses Reported In Earnings Related To Commodity And Interest Rate Derivative Instruments [Line Items]        
Gain (loss) on derivatives $ 397 $ (625) $ (445) $ (793)
Net cash receipts from (payments on) derivatives (7) (44) (57) (238)
Oil Commodity Derivative        
Derivative Financial Instruments Gains And Losses Reported In Earnings Related To Commodity And Interest Rate Derivative Instruments [Line Items]        
Gain (loss) on derivatives 355 (626) (506) (787)
Net cash receipts from (payments on) derivatives (21) (46) (72) (245)
Natural Gas Commodity Derivative        
Derivative Financial Instruments Gains And Losses Reported In Earnings Related To Commodity And Interest Rate Derivative Instruments [Line Items]        
Gain (loss) on derivatives 42 1 61 (6)
Net cash receipts from (payments on) derivatives $ 14 $ 2 $ 15 $ 7
v3.19.3
Derivative financial instruments (Outstanding Commodity Derivative Contracts) (Details)
MMBTU in Thousands, MBbls in Thousands, $ in Millions
9 Months Ended
Sep. 30, 2019
USD ($)
MMBTU
$ / MMBTU
$ / bbl
MBbls
Dec. 31, 2018
USD ($)
Derivative [Line Items]    
Derivative contracts outstanding, net position | $ $ 307 $ 695
Oil Costless Collars Q4 2019    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 1,058  
Oil Costless Collars Q4 2019 | Maximum    
Derivative [Line Items]    
Price (in dollars per unit) 62.95  
Oil Costless Collars Q4 2019 | Minimum    
Derivative [Line Items]    
Price (in dollars per unit) 55.43  
Oil Basis Swaps Q4 2019    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 16,053  
Price (in dollars per unit) (2.19)  
Oil Basis Swaps 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 45,998  
Price (in dollars per unit) (0.60)  
Oil Basis Swaps Q1 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 14,651  
Price (in dollars per unit) (0.46)  
Oil Basis Swaps Q2 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 10,647  
Price (in dollars per unit) (0.65)  
Oil Basis Swaps Q3 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 10,580  
Price (in dollars per unit) (0.66)  
Oil Basis Swaps Q4 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 10,120  
Price (in dollars per unit) (0.71)  
Oil Basis Swaps 2021    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 14,600  
Price (in dollars per unit) 0.57  
WTI | Oil Price Swaps Q4 2019    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 13,469  
Price (in dollars per unit) 56.46  
WTI | Oil Price Swaps 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 43,245  
Price (in dollars per unit) 56.96  
WTI | Oil Price Swaps Q1 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 12,517  
Price (in dollars per unit) 57.01  
WTI | Oil Price Swaps Q2 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 11,075  
Price (in dollars per unit) 56.88  
WTI | Oil Price Swaps Q3 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 10,067  
Price (in dollars per unit) 56.93  
WTI | Oil Price Swaps Q4 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 9,586  
Price (in dollars per unit) 57.01  
WTI | Oil Price Swaps 2021    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 13,137  
Price (in dollars per unit) 55.33  
Brent | Oil Price Swaps Q4 2019    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 2,178  
Price (in dollars per unit) 62.08  
Brent | Oil Price Swaps 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 5,856  
Price (in dollars per unit) 60.12  
Brent | Oil Price Swaps Q1 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 1,456  
Price (in dollars per unit) 60.12  
Brent | Oil Price Swaps Q2 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 1,456  
Price (in dollars per unit) 60.12  
Brent | Oil Price Swaps Q3 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 1,472  
Price (in dollars per unit) 60.12  
Brent | Oil Price Swaps Q4 2020    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 1,472  
Price (in dollars per unit) 60.12  
Brent | Oil Price Swaps 2021    
Derivative [Line Items]    
Volume (in Mbbls) | MBbls 0  
Price (in dollars per unit) 0  
Henry Hub | Natural Gas Price Swaps Q4 2019    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU 2.51  
Energy (in MMBTUs) | MMBTU 37,750  
Henry Hub | Natural Gas Price Swaps 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU 2.47  
Energy (in MMBTUs) | MMBTU 125,873  
Henry Hub | Natural Gas Price Swaps Q1 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU 2.46  
Energy (in MMBTUs) | MMBTU 35,024  
Henry Hub | Natural Gas Price Swaps Q2 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU 2.46  
Energy (in MMBTUs) | MMBTU 32,313  
Henry Hub | Natural Gas Price Swaps Q3 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU 2.47  
Energy (in MMBTUs) | MMBTU 30,038  
Henry Hub | Natural Gas Price Swaps Q4 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU 2.47  
Energy (in MMBTUs) | MMBTU 28,498  
Henry Hub | Natural Gas Price Swaps 2021    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU 2.52  
Energy (in MMBTUs) | MMBTU 36,500  
El Paso Permian | Natural Gas Basis Swaps Q4 2019    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (0.76)  
Energy (in MMBTUs) | MMBTU 28,820  
El Paso Permian | Natural Gas Basis Swaps 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.07)  
Energy (in MMBTUs) | MMBTU 93,580  
El Paso Permian | Natural Gas Basis Swaps Q1 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.06)  
Energy (in MMBTUs) | MMBTU 25,770  
El Paso Permian | Natural Gas Basis Swaps Q2 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.07)  
Energy (in MMBTUs) | MMBTU 23,960  
El Paso Permian | Natural Gas Basis Swaps Q3 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.07)  
Energy (in MMBTUs) | MMBTU 22,080  
El Paso Permian | Natural Gas Basis Swaps Q4 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.07)  
Energy (in MMBTUs) | MMBTU 21,770  
El Paso Permian | Natural Gas Basis Swaps 2021    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (0.66)  
Energy (in MMBTUs) | MMBTU 36,500  
WAHA | Natural Gas Basis Swaps Q4 2019    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (0.77)  
Energy (in MMBTUs) | MMBTU 9,200  
WAHA | Natural Gas Basis Swaps 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.10)  
Energy (in MMBTUs) | MMBTU 29,280  
WAHA | Natural Gas Basis Swaps Q1 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.10)  
Energy (in MMBTUs) | MMBTU 7,280  
WAHA | Natural Gas Basis Swaps Q2 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.10)  
Energy (in MMBTUs) | MMBTU 7,280  
WAHA | Natural Gas Basis Swaps Q3 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.10)  
Energy (in MMBTUs) | MMBTU 7,360  
WAHA | Natural Gas Basis Swaps Q4 2020    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (1.10)  
Energy (in MMBTUs) | MMBTU 7,360  
WAHA | Natural Gas Basis Swaps 2021    
Derivative [Line Items]    
Price (in dollars per unit) | $ / MMBTU (0.66)  
Energy (in MMBTUs) | MMBTU 10,950  
JPMORGAN CHASE BANK N.A.    
Derivative [Line Items]    
Derivative contracts outstanding, net position | $ $ 79  
Wells Fargo Bank N.A.    
Derivative [Line Items]    
Derivative contracts outstanding, net position | $ 72  
PNC Bank N.A.    
Derivative [Line Items]    
Derivative contracts outstanding, net position | $ $ 36  
v3.19.3
Debt (Summary Of Long-Term Debt) (Details) - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Debt Instrument [Line Items]    
Credit facility due 2022 $ 395 $ 242
Unamortized original issue discount (10) (10)
Senior notes issuance costs, net (36) (38)
Less: current portion 0 0
Total long-term debt 4,349 4,194
4.375% senior notes due 2025    
Debt Instrument [Line Items]    
Unsecured senior notes $ 600 $ 600
Interest rate 4.375% 4.375%
4.375% senior notes due 2025 | January 15, 2020    
Debt Instrument [Line Items]    
Callable price 103.281%  
4.375% senior notes due 2025 | January 15, 2021    
Debt Instrument [Line Items]    
Callable price 102.188%  
4.375% senior notes due 2025 | January 15, 2022    
Debt Instrument [Line Items]    
Callable price 101.094%  
4.375% senior notes due 2025 | January 15, 2023    
Debt Instrument [Line Items]    
Callable price 100.00%  
3.75% senior notes due 2027    
Debt Instrument [Line Items]    
Unsecured senior notes $ 1,000 $ 1,000
Interest rate 3.75% 3.75%
4.3% senior notes due 2028    
Debt Instrument [Line Items]    
Unsecured senior notes $ 1,000 $ 1,000
Interest rate 4.30% 4.30%
4.875% senior notes due 2047    
Debt Instrument [Line Items]    
Unsecured senior notes $ 800 $ 800
Interest rate 4.875% 4.875%
4.85% senior notes due 2048    
Debt Instrument [Line Items]    
Unsecured senior notes $ 600 $ 600
Interest rate 4.85% 4.85%
v3.19.3
Debt (Narrative) (Details) - Credit Facility
$ in Billions
3 Months Ended 9 Months Ended
Sep. 30, 2019
USD ($)
Sep. 30, 2019
USD ($)
Debt Disclosure [Line Items]    
Aggregate lender commitments $ 2.0 $ 2.0
Unused lender commitments $ 1.6 $ 1.6
Weighted average interest rate 4.00% 4.30%
v3.19.3
Debt (Summary Of Interest Expense) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Debt Disclosure [Abstract]        
Cash payments for interest $ 57 $ 16 $ 166 $ 76
Non-cash interest 2 1 5 4
Net changes in accruals (7) 31 (15) 28
Interest costs incurred 52 48 156 108
Less: capitalized interest (6) (2) (15) (5)
Total interest expense $ 46 $ 46 $ 141 $ 103
v3.19.3
Commitments and contingencies (Summary Of The Company's Future Commitments) (Details)
$ in Millions
Sep. 30, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Remaining 2019 $ 12
2020 62
2021 75
2022 38
2023 35
2024 36
Thereafter 102
Total $ 360
v3.19.3
Commitments and contingencies (Oil And Natural Gas Delivery Commitments) (Details)
bbl in Millions, Mcf in Millions
9 Months Ended
Sep. 30, 2019
Mcf
bbl
Oil (MMBbl)  
Long-term Purchase Commitment [Line Items]  
Remaining 2019 | bbl 7
2020 | bbl 49
2021 | bbl 51
2022 | bbl 59
2023 | bbl 51
2024 | bbl 47
Thereafter | bbl 113
Total | bbl 377
Natural Gas (MMcf)  
Long-term Purchase Commitment [Line Items]  
Remaining 2019 | Mcf 560
2020 | Mcf 1,633
2021 | Mcf 14,112
2022 | Mcf 16,425
2023 | Mcf 16,425
2024 | Mcf 16,470
Thereafter | Mcf 32,850
Total | Mcf 98,475
v3.19.3
Commitments and contingencies (Supplemental Balance Sheet Information Related To Leases) (Details)
$ in Millions
Sep. 30, 2019
USD ($)
Assets  
Operating lease right-of-use assets $ 16
Finance lease right-of-use assets 17
Total lease right-of-use assets 33
Current:  
Operating 8
Finance 6
Noncurrent:  
Operating 11
Finance 11
Total lease liabilities $ 36
v3.19.3
Commitments and contingencies (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]        
Undiscounted lease payments $ 15   $ 15  
Estimated lease incentives 5   5  
Gross lease cost related to short-term leases 64   248  
Short-term lease costs capitalized $ 43   $ 174  
Operating leases, lease payments   $ 3   $ 9
v3.19.3
Commitments and contingencies (Components Of Lease Expense) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]    
Operating lease cost $ 2 $ 6
Finance lease cost 2 6
Total lease cost $ 4 $ 12
v3.19.3
Commitments and contingencies (Supplemental Cash Flow Information Related To Leases) (Details)
$ in Millions
9 Months Ended
Sep. 30, 2019
USD ($)
Cash paid for amounts included in measurement of lease liabilities:  
Operating cash flows from operating leases $ 6
Financing cash flows from finance leases 6
Right-of-use assets obtained in exchange for lease obligations:  
Operating leases 3
Finance leases $ 7
v3.19.3
Commitments and contingencies (Lease Terms And Discount Rates Related To Leases) (Details)
Sep. 30, 2019
Weighted average remaining lease term (years):  
Operating leases 3 years 4 months 24 days
Finance leases 2 years 10 months 24 days
Weighted average discount rate:  
Operating leases 4.70%
Finance leases 4.30%
v3.19.3
Commitments and contingencies (Maturity Of Lease Liabilities) (Details)
$ in Millions
Sep. 30, 2019
USD ($)
Operating Leases  
Remaining 2019 $ 2
2020 8
2021 7
2022 2
2023 0
Thereafter 2
Total lease payments 21
Less: interest (2)
Present value of lease liabilities 19
Finance Leases  
Remaining 2019 2
2020 7
2021 5
2022 3
2023 1
Thereafter 0
Total lease payments 18
Less: interest (1)
Present value of lease liabilities $ 17
v3.19.3
Commitments and contingencies (Future Minimum Lease Commitments Under Non-Cancellable Operating Leases) (Details)
$ in Millions
Dec. 31, 2018
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2019 $ 14
2020 12
2021 10
2022 3
2023 0
Thereafter 1
Total $ 40
v3.19.3
Income taxes (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Aug. 29, 2019
Dec. 31, 2018
Income Tax Disclosure [Line Items]            
Income tax expense (benefit) $ 222 $ (69) $ (25) $ 225    
Effective tax rate 29.00% 26.00% 10.00% 23.00%    
Deferred state tax expense (benefit) $ (6)   $ (6)      
Unrecognized tax benefits that would impact effective tax rate           $ 63
Increase in unrecognized tax benefits for current year     $ 17      
New Mexico Shelf Divestiture            
Income Tax Disclosure [Line Items]            
Goodwill, disposal group         $ 81  
v3.19.3
Related party transactions (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Director        
Related Party Transaction [Line Items]        
Amounts paid $ 2 $ 2 $ 6 $ 6
Affiliated Entity        
Related Party Transaction [Line Items]        
Amounts paid $ 9   $ 24  
Director, As General Partner | Director        
Related Party Transaction [Line Items]        
Ownership interest in partnership     3.50%  
v3.19.3
Earnings per share (Reconciliation Of Earnings Attributable To Common Shares Basic And Diluted) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]        
Net income (loss) $ 558 $ (199) $ (234) $ 773
Participating basic earnings (4) 0 (1) (6)
Basic earnings (loss) attributable to common stockholders 554 (199) (235) 767
Reallocation of participating earnings 0 0 0 0
Diluted earnings (loss) attributable to common stockholders $ 554 $ (199) $ (235) $ 767
v3.19.3
Earnings per share (Reconciliation Of The Weighted Average Common Shares Outstanding) (Details) - shares
shares in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]        
Basic 199,448 188,953 199,272 161,605
Dilutive performance units 6 0 0 342
Diluted 199,454 188,953 199,272 161,947
v3.19.3
Earnings per share (Summary Of The Common Stock Options And Restricted Stock) (Details) - shares
shares in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Performance Shares        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Performance units 324 359 431 110
v3.19.3
Earnings per share (Narrative) (Details) - Performance Shares
9 Months Ended
Sep. 30, 2019
Minimum  
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]  
Vesting period 3 years
Vesting percentage 0.00%
Maximum  
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]  
Vesting period 5 years
Vesting percentage 300.00%
v3.19.3
Stockholders' equity (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Sep. 30, 2018
Equity [Abstract]      
Payment of common stock dividends $ 25 $ 75 $ 0
Dividends declared, amount per share (in dollars per share) $ 0.125 $ 0.375  
v3.19.3
Subsidiary guarantors (Condensed Consolidating Balance Sheet) (Details) - USD ($)
$ in Millions
Sep. 30, 2019
Jun. 30, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Dec. 31, 2017
ASSETS            
Accounts receivable - related parties $ 0   $ 0      
Other current assets 2,017   1,409      
Oil and natural gas properties, net 21,020   22,005      
Property and equipment, net 408   308      
Investment in subsidiaries 0   0      
Goodwill 2,141   2,224      
Other long-term assets 546   348      
Total assets 26,132   26,294      
LIABILITIES AND EQUITY            
Accounts payable - related parties 0   0      
Other current liabilities 1,340   1,356      
Long-term debt 4,349   4,194      
Other long-term liabilities 1,932   1,976      
Equity 18,511 $ 17,959 18,768 $ 17,232 $ 9,891 $ 8,915
Total liabilities and stockholders’ equity 26,132   26,294      
Consolidating Entries            
ASSETS            
Accounts receivable - related parties (18,133)   (18,155)      
Other current assets 0   0      
Oil and natural gas properties, net 0   0      
Property and equipment, net 0   0      
Investment in subsidiaries (5,741)   (5,411)      
Goodwill 0   0      
Other long-term assets 0   0      
Total assets (23,874)   (23,566)      
LIABILITIES AND EQUITY            
Accounts payable - related parties (18,133)   (18,155)      
Other current liabilities 0   0      
Long-term debt 0   0      
Other long-term liabilities 0   0      
Equity (5,741)   (5,411)      
Total liabilities and stockholders’ equity (23,874)   (23,566)      
Parent Issuer | Reportable Legal Entities            
ASSETS            
Accounts receivable - related parties 18,133   18,155      
Other current assets 208   534      
Oil and natural gas properties, net 0   0      
Property and equipment, net 0   0      
Investment in subsidiaries 5,741   5,411      
Goodwill 0   0      
Other long-term assets 134   224      
Total assets 24,216   24,324      
LIABILITIES AND EQUITY            
Accounts payable - related parties 0   0      
Other current liabilities 86   70      
Long-term debt 4,349   4,194      
Other long-term liabilities 1,270   1,292      
Equity 18,511   18,768      
Total liabilities and stockholders’ equity 24,216   24,324      
Subsidiary Guarantors | Reportable Legal Entities            
ASSETS            
Accounts receivable - related parties 0   0      
Other current assets 1,809   875      
Oil and natural gas properties, net 21,004   21,988      
Property and equipment, net 408   308      
Investment in subsidiaries 0   0      
Goodwill 2,141   2,224      
Other long-term assets 412   124      
Total assets 25,774   25,519      
LIABILITIES AND EQUITY            
Accounts payable - related parties 18,117   18,138      
Other current liabilities 1,254   1,286      
Long-term debt 0   0      
Other long-term liabilities 662   684      
Equity 5,741   5,411      
Total liabilities and stockholders’ equity 25,774   25,519      
Subsidiary Non-Guarantor | Reportable Legal Entities            
ASSETS            
Accounts receivable - related parties 0   0      
Other current assets 0   0      
Oil and natural gas properties, net 16   17      
Property and equipment, net 0   0      
Investment in subsidiaries 0   0      
Goodwill 0   0      
Other long-term assets 0   0      
Total assets 16   17      
LIABILITIES AND EQUITY            
Accounts payable - related parties 16   17      
Other current liabilities 0   0      
Long-term debt 0   0      
Other long-term liabilities 0   0      
Equity 0   0      
Total liabilities and stockholders’ equity $ 16   $ 17      
v3.19.3
Subsidiary guarantors (Condensed Consolidating 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
Condensed Consolidating Statement of Operations        
Total operating revenues $ 1,115 $ 1,192 $ 3,346 $ 3,084
Total operating costs and expenses (293) (1,417) (3,775) (2,091)
Income (loss) from operations 822 (225) (429) 993
Interest expense (46) (46) (141) (103)
Other, net 4 3 311 108
Income (loss) before income taxes 780 (268) (259) 998
Income tax (expense) benefit (222) 69 25 (225)
Net income (loss) 558 (199) (234) 773
Consolidating Entries        
Condensed Consolidating Statement of Operations        
Total operating revenues 0 0 0 0
Total operating costs and expenses 0 0 0 0
Income (loss) from operations 0 0 0 0
Interest expense 0 0 0 0
Other, net (431) (404) (330) (1,895)
Income (loss) before income taxes (431) (404) (330) (1,895)
Income tax (expense) benefit 0 0 0 0
Net income (loss) (431) (404) (330) (1,895)
Parent Issuer | Reportable Legal Entities        
Condensed Consolidating Statement of Operations        
Total operating revenues 0 0 0 0
Total operating costs and expenses 395 (626) (448) (794)
Income (loss) from operations 395 (626) (448) (794)
Interest expense (46) (46) (141) (103)
Other, net 431 404 330 1,895
Income (loss) before income taxes 780 (268) (259) 998
Income tax (expense) benefit (222) 69 25 (225)
Net income (loss) 558 (199) (234) 773
Subsidiary Guarantors | Reportable Legal Entities        
Condensed Consolidating Statement of Operations        
Total operating revenues 1,115 1,192 3,346 3,079
Total operating costs and expenses (688) (791) (3,327) (1,294)
Income (loss) from operations 427 401 19 1,785
Interest expense 0 0 0 0
Other, net 4 3 311 108
Income (loss) before income taxes 431 404 330 1,893
Income tax (expense) benefit 0 0 0 0
Net income (loss) 431 404 330 1,893
Subsidiary Non-Guarantor | Reportable Legal Entities        
Condensed Consolidating Statement of Operations        
Total operating revenues 0 0 0 5
Total operating costs and expenses 0 0 0 (3)
Income (loss) from operations 0 0 0 2
Interest expense 0 0 0 0
Other, net 0 0 0 0
Income (loss) before income taxes 0 0 0 2
Income tax (expense) benefit 0 0 0 0
Net income (loss) $ 0 $ 0 $ 0 $ 2
v3.19.3
Subsidiary guarantors (Condensed Consolidating Statement Of Cash Flows) (Details) - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Condensed Consolidating Statement of Operations    
Net cash provided by (used in) operating activities $ 2,067 $ 1,861
Net cash flows provided by (used in) investing activities (2,020) (1,422)
Net cash flows provided by (used in) financing activities (47) (415)
Net increase (decrease) in cash and cash equivalents 0 24
Cash and cash equivalents at beginning of period 0 0
Cash and cash equivalents at end of period 0 24
Consolidating Entries    
Condensed Consolidating Statement of Operations    
Net cash provided by (used in) operating activities 0 0
Net cash flows provided by (used in) investing activities 0 0
Net cash flows provided by (used in) financing activities 0 0
Net increase (decrease) in cash and cash equivalents 0 0
Cash and cash equivalents at beginning of period 0 0
Cash and cash equivalents at end of period 0 0
Parent Issuer | Reportable Legal Entities    
Condensed Consolidating Statement of Operations    
Net cash provided by (used in) operating activities (63) 386
Net cash flows provided by (used in) investing activities 0 0
Net cash flows provided by (used in) financing activities 63 (386)
Net increase (decrease) in cash and cash equivalents 0 0
Cash and cash equivalents at beginning of period 0 0
Cash and cash equivalents at end of period 0 0
Subsidiary Guarantors | Reportable Legal Entities    
Condensed Consolidating Statement of Operations    
Net cash provided by (used in) operating activities 2,130 1,475
Net cash flows provided by (used in) investing activities (2,020) (1,422)
Net cash flows provided by (used in) financing activities (110) (29)
Net increase (decrease) in cash and cash equivalents 0 24
Cash and cash equivalents at beginning of period 0 0
Cash and cash equivalents at end of period 0 24
Subsidiary Non-Guarantor | Reportable Legal Entities    
Condensed Consolidating Statement of Operations    
Net cash provided by (used in) operating activities 0 0
Net cash flows provided by (used in) investing activities 0 0
Net cash flows provided by (used in) financing activities 0 0
Net increase (decrease) in cash and cash equivalents 0 0
Cash and cash equivalents at beginning of period 0 0
Cash and cash equivalents at end of period $ 0 $ 0
v3.19.3
Subsequent events (Narrative) (Details)
Oct. 29, 2019
$ / shares
Subsequent Event  
Subsequent Event [Line Items]  
Dividends declared, amount per share (in dollars per share) $ 0.125
v3.19.3
Subsequent events (New Commodity Derivative Contracts) (Details)
MBbls in Thousands
9 Months Ended
Oct. 01, 2019
$ / bbl
MBbls
Sep. 30, 2019
$ / bbl
MBbls
Oil Basis Swaps 2021    
Subsequent Event [Line Items]    
Volume (in Mbbls) | MBbls   14,600
Price (in dollars per unit) | $ / bbl   0.57
Subsequent Event | Oil Basis Swaps 2021    
Subsequent Event [Line Items]    
Volume (in Mbbls) | MBbls 2,190  
Price (in dollars per unit) | $ / bbl 0.84  
WTI | Oil Price Swaps 2021    
Subsequent Event [Line Items]    
Volume (in Mbbls) | MBbls   13,137
Price (in dollars per unit) | $ / bbl   55.33
WTI | Subsequent Event | Oil Price Swaps 2021    
Subsequent Event [Line Items]    
Volume (in Mbbls) | MBbls 4,380  
Price (in dollars per unit) | $ / bbl 51.21  
v3.19.3
Supplementary information (Capitalized Costs) (Details) - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Business Acquisition [Line Items]    
Proved $ 22,080 $ 24,992
Unproved 6,417 6,714
Less: accumulated depletion (7,477) (9,701)
Net capitalized costs for oil and natural gas properties 21,020 $ 22,005
New Mexico Shelf Divestiture    
Business Acquisition [Line Items]    
Net capitalized costs for oil and natural gas properties $ 930  
v3.19.3
Supplementary information (Costs Incurred For Oil And Natural Gas Producing Activities) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Oil and Gas Exploration and Production Industries Disclosures [Abstract]        
Proved $ 0 $ 4,126 $ 0 $ 4,126
Unproved 20 3,578 33 3,596
Exploration 412 481 1,309 1,059
Development 258 280 1,072 653
Total costs incurred for oil and natural gas properties 690 8,465 2,414 9,434
Asset retirement obligation, costs incurred $ 13 $ 1 $ 16 $ 2