Impairments

Impairments of Oil and Natural Gas Properties

Our proved oil and natural gas properties are subject to quarterly full cost ceiling tests. Under the ceiling test, capitalized costs, less accumulated amortization and related deferred income taxes, may not exceed an amount equal to the sum of the present value of estimated future net revenues (adjusted for cash flow hedges) less estimated future expenditures to be incurred in developing and producing the proved reserves, less any related income tax effects. Estimated future net revenues for the quarterly ceiling limit are calculated using the average of commodity prices on the first day of the month over the trailing 12-month period. In the Current Quarter, the Prior Quarter, the Current Period and the Prior Period, capitalized costs of oil and natural gas properties exceeded the ceiling, resulting in impairments in the carrying value of our oil and natural gas properties of $433 million, $5.416 billion, $2.331 billion and $15.407 billion, respectively. Cash flow hedges which relate to future periods increased the ceiling test impairment by $154 million and $184 million in the Current Quarter and the Prior Quarter, respectively. During the quarter ended June 30, 2016, we recorded an impairment to the carrying value of our oil and natural gas properties of $1.045 billion, which was understated by approximately $14 million. The amount of the understatement has been included in our Current Quarter impairment.

Impairments of Fixed Assets and Other

We review our long-lived assets, other than oil and natural gas properties, for recoverability whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. We recognize an impairment if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. A summary of our impairments of fixed assets by asset class and other charges for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
	($ in millions)
Barnett Shale exit costs	$	616	$	—	$	616	$	—
Gathering systems	96		—		96		—
Natural gas compressors	32		—		52		21
Buildings and land	7		—		14		—
Other	—		79		17		146
Total impairments of fixed assets and other	$	751	$	79	$	795	$	167

Barnett Shale Exit Costs. On October 31, 2016, we conveyed our interests in the Barnett Shale operating area located in north central Texas and simultaneously terminated most of our future commitments associated with this asset. As a result of this transaction, we accrued $334 million of charges in the Current Quarter related to the termination of a natural gas gathering agreement associated with the Barnett Shale assets. Additionally, certain of our other property and equipment, including buildings, surface land, compressors and office equipment, qualified as held for sale as of September 30, 2016. We recognized an impairment charge of $282 million in the Current Quarter related to these assets representing the difference between the carrying amount and the fair value of the assets, less the anticipated costs to sell.

Gathering Systems, Natural Gas Compressors, Buildings and Land. In the Current Quarter, we entered into a purchase and sale agreement to sell the majority of our upstream and midstream assets in the Devonian Shale located in West Virginia and Kentucky. Additionally, certain of our other property and equipment, including gathering systems, natural gas compressors and buildings and land, qualified as held for sale as of September 30, 2016. We recognized an impairment charge of $134 million in the Current Quarter for these assets for the difference between the carrying amount and the fair value of the assets, less the anticipated costs to sell.

Nonrecurring Fair Value Measurements. Fair value measurements for certain of the impairments discussed above were based on recent sales information for comparable assets. As the fair value was estimated using the market approach based on recent prices from orderly sales transactions for comparable assets between market participants, these values were classified as Level 2 in the fair value hierarchy. Other inputs used were not observable in the market; these values were classified as Level 3 in the fair value hierarchy.