Inventory, Linefill and Base Gas and Long-term Inventory

3 Months Ended

Mar. 31, 2015

Inventory, Linefill and Base Gas and Long-term Inventory

Inventory, Linefill and Base Gas and Long-term Inventory

Note 5—Inventory, Linefill and Base Gas and Long-term Inventory

Inventory, linefill and base gas and long-term inventory consisted of the following as of the dates indicated (barrels and natural gas volumes in thousands and carrying value in millions):

	March 31, 2015						December 31, 2014
	Volumes	Unit of Measure	Carrying Value		Price/ Unit (1)		Volumes	Unit of Measure	Carrying Value		Price/ Unit (1)
Inventory
Crude oil	15,351	barrels	$	686	$	44.69	6,465	barrels	$	304	$	47.02
NGL	7,277	barrels	154		$	21.16	13,553	barrels	454		$	33.50
Natural gas	10,965	Mcf	31		$	2.83	32,317	Mcf	102		$	3.16
Other	N/A		58		N/A		N/A		31		N/A
Inventory subtotal			929						891

Linefill and base gas
Crude oil	12,970	barrels	777		$	59.91	11,810	barrels	744		$	63.00
NGL	1,215	barrels	48		$	39.51	1,212	barrels	52		$	42.90
Natural gas	28,612	Mcf	135		$	4.72	28,612	Mcf	134		$	4.68
Linefill and base gas subtotal			960						930

Long-term inventory
Crude oil	2,646	barrels	117		$	44.22	2,582	barrels	136		$	52.67
NGL	1,681	barrels	32		$	19.04	1,681	barrels	50		$	29.74
Long-term inventory subtotal			149						186

Total			$	2,038					$	2,007

(1)

Price per unit of measure is comprised of a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.

At the end of each reporting period, we assess the carrying value of our inventory and make any adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of “Purchases and related costs” on our accompanying Condensed Consolidated Statements of Operations. We recorded a charge of $24 million during the three months ended March 31, 2015 primarily related to the writedown of our NGL inventory due to declines in prices. The loss was substantially offset by a portion of the derivative mark-to-market gain that was recognized in the fourth quarter of 2014 for which the related derivatives were still open as of March 31, 2015. See Note 8 for discussion of our derivative and risk management activities. During the three months ended March 31, 2014, we recorded a charge of $37 million related to the writedown of our natural gas inventory that was purchased in conjunction with managing natural gas storage deliverability requirements during the extended period of severe cold weather in the first quarter of 2014.