XML 26 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Assets Held for Sale, Sold or Acquired
12 Months Ended
Dec. 31, 2019
Disposal Group Not Discontinued Operation Disposal Disclosures [Abstract]  
Long Lived Assets Held For Sale [Text Block]
Note 5—Asset Acquisitions and Dispositions
 
All gains or losses on asset dispositions are reported before-tax
 
and are included net in the “Gain on
dispositions” line on our consolidated income statement.
 
All cash proceeds are included in the “Cash Flows
From Investing Activities” section of our consolidated
 
statement of cash flows.
 
 
 
2019
Assets Held for Sale
In October 2019, we entered into an agreement to sell
 
the subsidiaries that hold our Australia-West assets and
operations to Santos for $
1.39
 
billion, plus customary adjustments, with an effective date
 
of January 1, 2019.
 
In addition, we will receive a payment of $
75
 
million upon final investment decision
 
of the Barossa
development project.
 
These subsidiaries hold our
37.5
 
percent interest in the Barossa Project and Caldita
Field, our
56.9
 
percent interest in the Darwin LNG Facility
 
and Bayu-Undan Field, our
40
 
percent interest in
the Greater Poseidon Fields, and our
50
 
percent interest in the Athena Field.
 
The net carrying value is
approximately $
0.6
 
billion, which consisted primarily of $
1.2
 
billion of PP&E and $
0.3
 
billion of cash and
working capital, offset by $
0.7
 
billion of ARO and $
0.2
 
billion of deferred tax liabilities.
 
The assets met held
for sale criteria in the fourth quarter, and as of December 31, 2019 we had
 
reclassified $
1.2
 
billion of PP&E to
“Prepaid expenses and other current assets” and $
0.7
 
billion of noncurrent ARO to “Other accruals”
 
on our
consolidated balance sheet.
 
The before-tax earnings associated with our Australia-West subsidiaries were
$
372
 
million, $
364
 
million and $
317
 
million for the years ended December 31, 2019,
 
2018 and 2017,
respectively.
 
This transaction is expected to be completed
 
in the first quarter of 2020, subject to regulatory
approvals and other specific conditions precedent.
 
Results of operations for the subsidiaries to
 
be sold are
reported within our Asia Pacific segment.
 
In the fourth quarter of 2019, we signed an agreement
 
to sell our interests in the Niobrara shale play
 
for $
380
million, plus customary adjustments,
 
and overriding royalty interests in certain future
 
wells.
 
To reduce the
carrying value to fair value, in the fourth quarter of 2019,
 
we recorded an impairment of $
379
 
million before-
tax for developed properties and exploration expenses of
 
$
7
 
million related to leasehold impairment of
undeveloped properties.
 
Our Niobrara interests to be sold
 
have a net carrying value of approximately $
390
million, which consisted primarily of $
426
 
million of PP&E, offset by $
34
 
million of noncurrent ARO.
 
The
assets met held for sale criteria in the fourth quarter, and as of December 31, 2019,
 
we had reclassified $
426
million of PP&E to “Prepaid expenses and other current
 
assets” and $
34
 
million of noncurrent AROs to “Other
accruals” on our consolidated balance sheet.
 
The before-tax losses associated with our interests
 
in Niobrara,
including the $386 million of impairments noted above, were
 
$
372
 
million and $
12
 
million for the years ended
December 31, 2019 and 2017,
 
respectively.
 
The before-tax earnings associated with our interests
 
in Niobrara
for the year ended December 31, 2018 was $
35
 
million.
 
This transaction is subject to regulatory approval and
other specific conditions precedent and is expected
 
to close in the first quarter of 2020.
 
The Niobrara results of
operations are reported within our Lower 48 segment.
 
 
Assets
 
Sold
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 15—Fair Value
Measurement for additional information.
 
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,
 
with an effective date of January 1, 2018.
 
On September 30, 2019, we completed the sale for proceeds
 
of $
2.2
 
billion and recognized a $
1.7
 
billion
before-tax and $
2.1
 
billion after-tax gain associated with this transaction in
 
2019.
 
Together the subsidiaries
sold indirectly held our exploration and production assets
 
in the U.K.
 
At the time of disposition, the net
carrying value was approximately $
0.5
 
billion, consisting primarily of $
1.6
 
billion of PP&E, $
0.5
 
billion of
cumulative foreign currency translation adjustments, and
 
$
0.3
 
billion of deferred tax assets, offset by $
1.8
billion of ARO and negative $
0.1
 
billion of working capital.
 
The before-tax earnings associated with the
subsidiaries sold were $
0.4
 
billion, $
0.9
 
billion and $
0.3
 
billion for the years ended December 31,
 
2019, 2018
and 2017, respectively.
 
Results of operations for the U.K.
 
are reported within our Europe,
 
Middle East and
North Africa segment.
 
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.
 
The
Greater Sunrise Fields were
 
included in our Asia Pacific segment.
 
 
In the fourth quarter of 2019, we sold our interests in the
 
Magnolia field and platform for net proceeds of $
16
million and recognized a before-tax gain of $
82
 
million.
 
At the time of sale, the net carrying value consisted
of $
4
 
million of PP&E offset by $
70
 
million of ARO.
 
The Magnolia results of operations are reported within
our Lower 48 segment.
 
Planned Dispositions
In January 2020, we entered into an agreement to
 
sell our interests in certain non-core properties
 
in the Lower
48 segment for $
186
 
million, plus customary adjustments.
 
The assets met the held for sale criteria in January
2020 and the transaction is expected to be completed in
 
the first quarter of 2020.
 
No gain or loss is anticipated
on the sale.
 
This disposition will not have a significant impact
 
on Lower 48 production.
 
 
2018
Assets
 
Sold
In the first quarter of 2018, we completed the sale of
 
certain properties in the Lower 48 segment for net
proceeds of $
112
 
million.
 
No
 
gain or loss was recognized on the sale.
 
In the second quarter of 2018, we
completed the sale of a package of largely undeveloped acreage
 
in the Lower 48 segment for net proceeds
 
of
$
105
 
million and
no
 
gain or loss was recognized on the sale.
 
In the third quarter of 2018, we completed
 
a
noncash exchange of undeveloped acreage in the Lower
 
48 segment.
 
The transaction was recorded at fair
value resulting in the recognition of a $
56
 
million gain.
 
In the fourth quarter of 2018, we
 
sold several
packages of undeveloped acreage in the Lower 48 segment
 
for total net proceeds of $
162
 
million and
recognized gains of approximately $
140
 
million.
 
 
On October 31, 2018, we completed the sale of our interests
 
in the Barnett to Lime Rock Resources for $
196
million after customary adjustments and recognized
 
a loss of $
5
 
million. We recorded impairments of $
87
million in 2018 and $
572
 
million in 2017 to reduce the net carrying value
 
of the Barnett to fair value.
 
At the
time of the disposition, our interest in Barnett had a
 
net carrying value of $
201
 
million, consisting of $
250
million of PP&E and $
49
 
million of AROs.
 
The before-tax losses associated with our interests
 
in the Barnett,
including both the impairments and loss on disposition
 
noted above, were $
59
 
million and $
566
 
million for the
years 2018 and 2017, respectively.
 
The Barnett results of operations are
 
included in our Lower 48 segment.
 
On December 18, 2018, we completed the sale of a ConocoPhillips
 
subsidiary to BP.
 
The subsidiary held
 
16.5
 
percent of our 24 percent interest in the BP-operated
 
Clair Field in the U.K.
 
We retained a
7.5
 
percent
interest in the field.
 
At the same time, we acquired BP’s 39.2 percent nonoperated interest
 
in the Greater
Kuparuk Area in Alaska, including their 38 percent interest
 
in the Kuparuk Transportation Company (Kuparuk
Assets).
 
The transaction was recorded at a fair value of $
1,743
 
million and was cash neutral except for
customary adjustments which resulted in net proceeds
 
of $
253
 
million.
 
At closing, our interest in the Clair
Field had a net carrying value of approximately $
1,028
 
million consisting primarily of $
1,553
 
million of
PP&E, $
485
 
million of deferred tax liabilities, and $
59
 
million of AROs.
 
We recognized a before-tax gain of
$
715
 
million on the transaction.
 
The 2018 before-tax earnings associated with our
 
16.5 interest in the Clair
Field, including the recognized gain, were $
748
 
million.
 
The before-tax loss associated with our interest in the
Clair Field was $
0.4
 
million for 2017. Results of operations
 
for our interest in the Clair Field are reported
within our Europe,
 
Middle East and North Africa segment
 
and the Kuparuk Assets are included in our Alaska
segment.
 
Acquisitions
In May 2018, we completed the acquisition of Anadarko’s
22
 
percent nonoperated interest in the Western
North Slope of Alaska, as well as its interest in the Alpine
 
Transportation Pipeline for $
386
 
million, after
customary adjustments.
 
This transaction was accounted for as a
 
business combination resulting in the
recognition of approximately $
297
 
million of proved property and $
114
 
million of unproved property within
PP&E, $
20
 
million of inventory, $
14
 
million of investments, and $
59
 
million of AROs. These assets are
included in our Alaska segment.
 
As discussed in the Clair Field transaction with BP
 
above, we acquired BP’s Kuparuk Assets on December 18,
2018.
 
The transaction was accounted for as an asset acquisition
 
with a net acquisition cost of $
1,490
 
million,
comprised of the fair value of $
1,743
 
million associated with the disposed 16.5
 
percent of our 24 percent
interest in the Clair Field, reduced by the net proceeds
 
of $253 million.
 
Accordingly, we recorded
approximately $
1.9
 
billion to proved property within PP&E,
 
$
42
 
million to inventory, $
15
 
million to
investments, $
374
 
million of AROs, and a $
100
 
million decrease to net working capital.
 
The Kuparuk Assets
are included in our Alaska segment.
 
2017
Assets Sold
On May 17, 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 was $
11.0
 
billion in cash after customary adjustments,
208
 
million Cenovus
Energy common shares and a five-year uncapped contingent
 
payment.
 
The value of the shares at closing was
$
1.96
 
billion based on a price of $
9.41
 
per share on the NYSE.
 
The contingent payment, calculated and paid
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 reflected as “Gain
on dispositions” on our consolidated income statement.
 
We
 
reported before-tax equity earnings associated
with FCCL of $
197
 
million for 2017.
 
We reported a before-tax loss of $
26
 
million for the western Canada gas
producing properties for 2017.
 
We recorded gains on dispositions for these contingent payments of $
114
million and $
95
 
million for the years 2019 and 2018, respectively.
 
 
At closing, the carrying value of our equity investment
 
in FCCL was $
8.9
 
billion.
 
The carrying value of our
interest in the western Canada gas assets was $
1.9
 
billion consisting primarily of $
2.6
 
billion of PP&E, partly
offset by AROs of $
585
 
million and approximately $
100
 
million of environmental and other accruals.
 
A gain
of $
2.1
 
billion was included in the “Gain on dispositions”
 
line on our consolidated income statement in 2017.
 
Both FCCL and the western Canada gas assets were reported
 
in our Canada segment.
 
 
For more information on the Canada disposition and
 
our investment in Cenovus Energy see Note 7—
Investment in Cenovus Energy, Note 15—Fair Value
 
Measurement, and Note 20—Accumulated
 
Other
Comprehensive Loss.
 
In July 2017, we completed the sale of our interests
 
in the San Juan Basin to an affiliate of Hilcorp Energy
Company for $
2.5
 
billion in cash after customary adjustments and
 
recognized a loss on disposition of
$
22
 
million.
 
The transaction includes a contingent payment of up to $300 million. The six-year contingent
payment, effective beginning January 1, 2018, is due annually for the periods in which the monthly U.S. Henry
Hub price is at or above $3.20 per MMBTU.
 
In 2018, we recorded a gain on dispositions for
 
these contingent
payments of $
28
 
million.
 
No
 
contingent payments were recorded in 2019.
 
In the second quarter of 2017, we
recorded an impairment of $
3.3
 
billion to reduce the carrying value of our interests
 
in the San Juan Basin to
fair value.
 
At the time of disposition, the San Juan Basin interests
 
had a net carrying value of approximately
$
2.5
 
billion, consisting of $
2.9
 
billion of PP&E and $
406
 
million of liabilities, primarily AROs.
 
The before-
tax loss associated with our interests in the San Juan Basin,
 
including both the $3.3 billion impairment and $22
million loss on disposition noted above, was $
3.2
 
billion for 2017.
 
The San Juan Basin results were reported
in our Lower 48 segment.
 
 
In September 2017, we completed the sale of our interest
 
in the Panhandle assets for $
178
 
million in cash after
customary adjustments and recognized a loss on disposition
 
of $
28
 
million.
 
At the time of the disposition, the
carrying value of our interest was $
206
 
million, consisting primarily of $
279
 
million of PP&E and $
72
 
million
of AROs.
 
Including the $28 million loss on disposition
 
noted above, we reported a before-tax loss
 
for the
Panhandle properties of $
14
 
million for 2017.
 
The Panhandle results were reported in our
 
Lower 48 segment.