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Assets Held for Sale or Sold
6 Months Ended
Jun. 30, 2019
Disposal Group Excluding Discontinued Operation Additional Disclosures [Abstract]  
Long Lived Assets Held For Sale [Text Block]

Note 5—Assets Held for Sale and Dispositions

 

Assets Held for Sale

In April 2019, we entered into an agreement to sell two ConocoPhillips U.K. subsidiaries to Chrysaor E&P Limited for $2.675 billion plus interest and customary adjustments. Together the subsidiaries indirectly hold the company’s exploration and production assets in the U.K. As of June 30, 2019, the net carrying value was approximately $0.8 billion and the assets were considered held for sale resulting in the reclassification of $1.6 billion of PP&E and $0.2 billion of “Other assets”, primarily right-of-use assets, to “Prepaid expenses and other current assets”, and $1.9 billion of noncurrent liabilities, primarily asset retirement obligations, to “Other accruals” on our consolidated balance sheet. As a result of entering into the transaction agreement, we recognized a U.S. tax benefit of $234 million in the second quarter of 2019, primarily related to the recognition of U.S. tax basis in our U.K. subsidiaries to be sold. Depending on the timing of regulatory approval and satisfaction of conditions precedent, we anticipate recognizing an additional gain of approximately $2 billion before- and after-tax on completion of the sale in the second half of 2019, subject to customary adjustments and foreign exchange impacts. The before tax earnings associated with the subsidiaries being sold were $293 million and $432 million for the six-month periods ended June 30, 2019 and June 30, 2018, respectively. Results of operations for the U.K. are reported within our Europe and North Africa segment.

 

Asset Dispositions

In the second quarter of 2019, we recognized an after-tax gain of $52 million upon the closing of the sale of our 30 percent interest in the Greater Sunrise Fields to the government of Timor-Leste for $350 million, before customary adjustments. The Greater Sunrise Fields were included in our Asia Pacific and Middle East segment.

 

In January 2019, we entered into agreements to sell our 12.4 percent ownership interests in the Golden Pass LNG Terminal and Golden Pass Pipeline. We also entered into agreements to amend our contractual obligations for retaining use of the facilities. As a result of entering into these agreements, we recorded a before-tax impairment of $60 million in the first quarter of 2019 which is included in the “Equity in earnings of affiliates” line on our consolidated income statement. We completed the sale in the second quarter of 2019. Results of operations for these assets are reported in our Lower 48 segment. See Note 14—Fair Value Measurement for additional information.

 

In the second quarter of 2017, we completed the sale of our 50 percent nonoperated interest in the Foster Creek Christina Lake (FCCL) Partnership, as well as the majority of our western Canada gas assets to Cenovus Energy. Consideration for the transaction included a five-year uncapped contingent payment. The contingent payment, calculated on a quarterly basis, is $6 million CAD for every $1 CAD by which the WCS quarterly average crude price exceeds $52 CAD per barrel. Contingent payments received during the five-year period are recorded as “Gain on dispositions” on our consolidated income statement and reflected in our Canada segment. We recorded gains on dispositions for these contingent payments of $19 million and $56 million in the first and second quarters of 2019, respectively, and $50 million in the second quarter of 2018.