XML 49 R37.htm IDEA: XBRL DOCUMENT v3.5.0.2

Derivative and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

The estimated fair values of our oil, natural gas and NGL derivative instrument assets (liabilities) as of September 30, 2016 and December 31, 2015 are provided below. 

		September 30, 2016							December 31, 2015
		Volume			Fair Value				Volume			Fair Value
					($ in millions)							($ in millions)
Oil (mmbbl):
Fixed-price swaps		21.8			$	(49	)		13.5			$	144
Call options		8.7			(2		)		19.2			(7		)
Total oil		30.5			(51		)		32.7			137
Natural gas (tbtu):
Fixed-price swaps		640			(43		)		500			229
Collars		38			1				—			—
Call options		160			(26		)		295			(99		)
Basis protection swaps		44			1				57			—
Total natural gas		882			(67		)		852			130
NGL (mmgal):
Fixed-price swaps		36			(3		)		—			—
Total estimated fair value					$	(121	)					$	267

Schedule Of Derivative Instruments In Condensed Consolidated Balance Sheets

The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015 on a gross basis and after same-counterparty netting: 

Balance Sheet Classification		Gross Fair Value				Amounts Netted in Condensed Consolidated Balance Sheet				Net Fair Value Presented in Condensed Consolidated Balance Sheet
		($ in millions)
As of September 30, 2016
Commodity Contracts:
Short-term derivative asset		$	31			$	(31	)		$	—
Short-term derivative liability		(135		)		31				(104		)
Long-term derivative asset		1				(1		)		—
Long-term derivative liability		(18		)		1				(17		)
Total commodity contracts		(121		)		—				(121		)
Foreign Currency Contracts:(a)
Short-term derivative liability		(56		)		—				(56		)
Total foreign currency contracts		(56		)		—				(56		)
Total derivatives		$	(177	)		$	—			$	(177	)
As of December 31, 2015
Commodity Contracts:
Short-term derivative asset		$	381			$	(66	)		$	315
Short-term derivative liability		(106		)		66				(40		)
Long-term derivative liability		(8		)		—				(8		)
Total commodity contracts		267				—				267
Foreign Currency Contracts:(a)
Long-term derivative liability		(52		)		—				(52		)
Total foreign currency contracts		(52		)		—				(52		)
Supply Contracts:
Short-term derivative asset		51				—				51
Long-term derivative asset		246				—				246
Total supply contracts		297				—				297
Total derivatives		$	512			$	—			$	512

____________________________________________

(a) Designated as cash flow hedging instruments

Schedule of Derivative Instruments, Natural Gas and Oil Sales

The components of oil, natural gas and NGL revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below. 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2016				2015				2016				2015
		($ in millions)
Oil, natural gas and NGL revenues		$	1,048			$	1,136			$	2,744			$	3,782
Gains (losses) on undesignated oil, natural gas and NGL derivatives		136				234				(110		)		369
Losses on terminated cash flow hedges		(7		)		(7		)		(24		)		(29		)
Total oil, natural gas and NGL revenues		$	1,177			$	1,363			$	2,610			$	4,122

The components of marketing, gathering and compression revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below.    

		Three Months Ended September 30,								Nine Months Ended September 30,
		2016				2015				2016				2015
		($ in millions)
Marketing, gathering and compression revenues		$	1,379			$	1,943			$	3,538			$	5,703
Gains (losses) on undesignated supply contract derivatives		(280		)		70				(297		)		290
Total marketing, gathering and compression revenues		$	1,099			$	2,013			$	3,241			$	5,993

Schedule of Derivative Instruments, Marketing, Gathering and Compression Sales

The components of oil, natural gas and NGL revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below. 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2016				2015				2016				2015
		($ in millions)
Oil, natural gas and NGL revenues		$	1,048			$	1,136			$	2,744			$	3,782
Gains (losses) on undesignated oil, natural gas and NGL derivatives		136				234				(110		)		369
Losses on terminated cash flow hedges		(7		)		(7		)		(24		)		(29		)
Total oil, natural gas and NGL revenues		$	1,177			$	1,363			$	2,610			$	4,122

The components of marketing, gathering and compression revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below.    

		Three Months Ended September 30,								Nine Months Ended September 30,
		2016				2015				2016				2015
		($ in millions)
Marketing, gathering and compression revenues		$	1,379			$	1,943			$	3,538			$	5,703
Gains (losses) on undesignated supply contract derivatives		(280		)		70				(297		)		290
Total marketing, gathering and compression revenues		$	1,099			$	2,013			$	3,241			$	5,993

Interest Income And Interest Expense Disclosure

The components of interest expense for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below. 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2016				2015				2016				2015
		($ in millions)
Interest expense on senior notes		$	114			$	171			$	336			$	513
Amortization of loan discount, issuance costs and other		9				14				27				37
Interest expense on revolving credit facility		10				2				27				8
Gains on terminated fair value hedges		(1		)		—				(2		)		(2		)
Gains on undesignated interest rate derivatives		—				—				—				(10		)
Capitalized interest		(59		)		(99		)		(191		)		(336		)
Total interest expense		$	73			$	88			$	197			$	210

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

A reconciliation of the changes in accumulated other comprehensive income (loss) in our condensed consolidated statements of stockholders’ equity related to our cash flow hedges is presented below.

		Three Months Ended September 30,
		2016								2015
		Before  Tax				After  Tax				Before  Tax				After  Tax
		($ in millions)
Balance, beginning of period		$	(163	)		$	(104	)		$	(211	)		$	(131	)
Net change in fair value		(4		)		(4		)		12				7
Losses reclassified to income		7				7				7				5
Balance, end of period		$	(160	)		$	(101	)		$	(192	)		$	(119	)
		Nine Months Ended September 30,
		2016								2015
		Before  Tax				After  Tax				Before  Tax				After  Tax
		($ in millions)
Balance, beginning of period		$	(160	)		$	(99	)		$	(231	)		$	(143	)
Net change in fair value		(23		)		(23		)		10				6
Losses reclassified to income		23				21				29				18
Balance, end of period		$	(160	)		$	(101	)		$	(192	)		$	(119	)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:

		Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total Fair Value
						($ in millions)
As of September 30, 2016
Derivative Assets (Liabilities):
Commodity assets		$	—			$	32			$	—			$	32
Commodity liabilities		—				(123		)		(30		)		(153		)
Foreign currency liabilities		—				(56		)		—				(56		)
Total derivatives		$	—			$	(147	)		$	(30	)		$	(177	)
As of December 31, 2015
Derivative Assets (Liabilities):
Commodity assets		$	—			$	372			$	9			$	381
Commodity liabilities		—				(14		)		(100		)		(114		)
Foreign currency liabilities		—				(52		)		—				(52		)
Supply contract assets		—				—				297				297
Total derivatives		$	—			$	306			$	206			$	512

A summary of the changes in the fair values of Chesapeake’s financial assets (liabilities) classified as Level 3 during the Current Period and the Prior Period is presented below.

		Commodity Derivatives				Supply Contracts
		($ in millions)
Beginning balance as of December 31, 2015		$	(91	)		$	297
Total gains (losses) (realized/unrealized):
Included in earnings(a)		12				(118		)
Total purchases, issuances, sales and settlements:
Settlements		49				(33		)
Sales		—				(146		)
Ending balance as of September 30, 2016		$	(30	)		$	—
Beginning balance as of December 31, 2014		$	(54	)		$	1
Total gains (losses) (realized/unrealized):
Included in earnings(a)		99				281
Total purchases, issuances, sales and settlements:
Settlements		(122		)		9
Ending balance as of September 30, 2015		$	(77	)		$	291

___________________________________________

(a)		Oil, Natural Gas and NGL Sales								Marketing, Gathering and Compression Revenue
																		2016				2015				2016				2015
		($ in millions)
Total gains (losses) included in earnings for the period		$	12			$	99			$	(118	)		$	281
Change in unrealized gains (losses) related to assets still held at reporting date		$	(1	)		$	72			$	—			$	281

The following table provides fair value measurement information for the above-noted financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:

		Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total Fair Value
						($ in millions)
As of September 30, 2016
Financial Assets (Liabilities):
Other current assets		$	48			$	—			$	—			$	48
Other current liabilities		(49		)		—				—				(49		)
Total		$	(1	)		$	—			$	—			$	(1	)
As of December 31, 2015
Financial Assets (Liabilities):
Other current assets		$	50			$	—			$	—			$	50
Other current liabilities		(51		)		—				—				(51		)
Total		$	(1	)		$	—			$	—			$	(1	)

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:

		Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total Fair Value
						($ in millions)
As of September 30, 2016
Derivative Assets (Liabilities):
Commodity assets		$	—			$	32			$	—			$	32
Commodity liabilities		—				(123		)		(30		)		(153		)
Foreign currency liabilities		—				(56		)		—				(56		)
Total derivatives		$	—			$	(147	)		$	(30	)		$	(177	)
As of December 31, 2015
Derivative Assets (Liabilities):
Commodity assets		$	—			$	372			$	9			$	381
Commodity liabilities		—				(14		)		(100		)		(114		)
Foreign currency liabilities		—				(52		)		—				(52		)
Supply contract assets		—				—				297				297
Total derivatives		$	—			$	306			$	206			$	512

A summary of the changes in the fair values of Chesapeake’s financial assets (liabilities) classified as Level 3 during the Current Period and the Prior Period is presented below.

		Commodity Derivatives				Supply Contracts
		($ in millions)
Beginning balance as of December 31, 2015		$	(91	)		$	297
Total gains (losses) (realized/unrealized):
Included in earnings(a)		12				(118		)
Total purchases, issuances, sales and settlements:
Settlements		49				(33		)
Sales		—				(146		)
Ending balance as of September 30, 2016		$	(30	)		$	—
Beginning balance as of December 31, 2014		$	(54	)		$	1
Total gains (losses) (realized/unrealized):
Included in earnings(a)		99				281
Total purchases, issuances, sales and settlements:
Settlements		(122		)		9
Ending balance as of September 30, 2015		$	(77	)		$	291

___________________________________________

(a)		Oil, Natural Gas and NGL Sales								Marketing, Gathering and Compression Revenue
																		2016				2015				2016				2015
		($ in millions)
Total gains (losses) included in earnings for the period		$	12			$	99			$	(118	)		$	281
Change in unrealized gains (losses) related to assets still held at reporting date		$	(1	)		$	72			$	—			$	281

Fair Value Inputs, Assets, Quantitative Information

The following table presents quantitative information about Level 3 inputs used in the fair value measurement of our commodity derivative contracts at fair value as of September 30, 2016:

Instrument Type		Unobservable Input		Range		Weighted Average		Fair Value September 30, 2016
								($ in millions)
Oil trades(a)		Oil price volatility curves		21.09% – 31.73%		29.04%		$	(2	)
Natural gas trades(a)		Natural gas price volatility curves		21.20% – 59.56%		25.31%		$	(28	)

___________________________________________

(a) Fair value is based on an estimate derived from option models.

X

- References

No definition available.

+ Details

Name:	us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19279-110258

+ Details

Name:	us-gaap_FairValueAssetsMeasuredOnRecurringBasisUnobservableInputReconciliationTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of quantitative information about the inputs used in the fair value measurement of assets. This disclosure may include, but is not limited to, the fair value of the asset, valuation technique used to measure fair value, the inputs used to measure fair value, the ranges of the inputs, and the weighted averages of the inputs.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (bbb)
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueInputsAssetsQuantitativeInformationTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of interest income and expense, including, but not limited to, interest income and expense from investments, loans, and securities.

+ References

No definition available.

+ Details

Name:	us-gaap_InterestIncomeAndInterestExpenseDisclosureTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the effective portion of gains and losses on derivative instruments (and nonderivative instruments) designated and qualifying in cash flow hedges recorded in accumulated other comprehensive income (loss) during the term of the hedging relationship and reclassified into earnings during the current period.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959

+ Details

Name:	us-gaap_ScheduleOfCashFlowHedgesIncludedInAccumulatedOtherComprehensiveIncomeLossTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624163-113959

+ Details

Name:	us-gaap_ScheduleOfDerivativeInstrumentsInStatementOfFinancialPositionFairValueTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of derivative instruments (including nonderivative instruments that are designated and qualify as hedging instruments) of (a) the location and amount of gains and losses reported in the statement of financial performance and (b) the location and fair value amounts of the instruments reported in the statement of financial position.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5618551-113959

+ Details

Name:	us-gaap_ScheduleOfDerivativesInstrumentsStatementsOfFinancialPerformanceAndFinancialPositionLocationTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19190-110258

+ Details

Name:	us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the notional amounts of outstanding derivative positions.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579245-113959

+ Details

Name:	us-gaap_ScheduleOfNotionalAmountsOfOutstandingDerivativePositionsTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration