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FRESH START ACCOUNTING (Tables) | 12 Months Ended
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Dec. 31, 2020
Reorganizations [Abstract] |
Reconciliation of enterprise value | The following table summarizes our enterprise value upon emergence (in millions):
Fair value of total equity upon emergence |  | $ | 1,345 |
Fair value of long-term debt |  | 725 |
Fair value of asset retirement obligations |  | 593 |
Less: Unrestricted cash(a) |  | (163) |
Total Enterprise Value |  | $ | 2,500 |
(a)Includes $118 million of cash used to temporarily collateralize letters of credit at our emergence date. The following table reconciles our enterprise value to our reorganization value, or total asset value, upon emergence (in millions):
Enterprise value |  | $ | 2,500 |
Add: Unrestricted cash(a) |  | 163 |
Add: Current liabilities(b) |  | 396 |
Add: Other long-term liabilities(b) |  | 231 |
Less: Other |  | (2) |
Reorganization value |  | $ | 3,288 |
(a)Includes $118 million of cash used to temporarily collateralize letters of credit. (b)Excludes asset retirement obligations of $50 million in current liabilities and $543 million in other long-term liabilities.
Schedule of fresh-start adjustments | The following consolidated balance sheet, with accompanying explanatory notes, illustrates the effects of the transactions contemplated by the Plan (Reorganization Adjustments) and fair value adjustments resulting from the adoption of fresh start accounting (Fresh Start Adjustments) as of October 31, 2020 (in millions):
| Predecessor |  | Reorganization Adjustments |  | Fresh Start Adjustments |  | Successor
CURRENT ASSETS |  |  |  |  |  |  |
Cash | $ | 106 |  |  | $ | 97 |  | (1) | $ | — |  |  | $ | 203 |
Trade receivables | 149 |  |  | — |  |  | — |  |  | 149 |
Inventories | 61 |  |  | — |  |  | — |  |  | 61 |
Other current assets, net | 104 |  |  | (2) |  | (2) | — |  |  | 102 |
Total current assets | 420 |  |  | 95 |  |  | — |  |  | 515 |
PROPERTY, PLANT AND EQUIPMENT | 22,918 |  |  | — |  |  | (20,236) |  | (12) | 2,682 |
Accumulated depreciation, depletion and amortization | (18,588) |  |  | — |  |  | 18,588 |  | (12) | — |
Total property, plant and equipment, net | 4,330 |  |  | — |  |  | (1,648) |  |  | 2,682 |
OTHER ASSETS | 77 |  |  | 18 |  | (3) | (4) |  | (13) | 91 |
TOTAL ASSETS | $ | 4,827 |  |  | $ | 113 |  |  | $ | (1,652) |  |  | $ | 3,288 |
| Predecessor |  | Reorganization Adjustments |  | Fresh Start Adjustments |  | Successor
CURRENT LIABILITIES |  |  |  |  |  |  |
Debtor-in-possession financing | 733 |  |  | (733) |  | (4) | — |  |  | — |
Accounts payable | 215 |  |  | — |  |  | — |  |  | 215 |
Accrued liabilities | 233 |  |  | (16) |  | (5) | 14 |  | (14) | 231 |
Total current liabilities | 1,181 |  |  | (749) |  |  | 14 |  |  | 446 |
LONG-TERM DEBT, NET | — |  |  | 723 |  | (6) | — |  |  | 723 |
OTHER LONG-TERM LIABILITIES | 725 |  |  | — |  |  | 49 |  | (15) | 774 |
LIABILITIES SUBJECT TO COMPROMISE | 4,516 |  |  | (4,516) |  | (7) | — |  |  | — |
MEZZANINE EQUITY |  |  |  |  |  |  |
Redeemable noncontrolling interests | 691 |  |  | (691) |  | (8) | — |  |  | — |
EQUITY |  |  |  |  |  |  |
Predecessor preferred stock | — |  |  | — |  |  | — |  |  | — |
Predecessor common stock | — |  |  | — |  |  | — |  |  | — |
Predecessor additional paid-in capital | 5,149 |  |  | (5,149) |  | (9) | — |  |  | — |
Successor preferred stock | — |  |  |  |  | — |  |  | — |
Successor common stock | — |  |  | 1 |  | (10) | — |  |  | 1 |
Successor additional paid-in capital | — |  |  | 1,253 |  | (10) | — |  |  | 1,253 |
Successor warrants | — |  |  | 15 |  | (10) | — |  |  | 15 |
Accumulated deficit | (7,481) |  |  | 9,226 |  | (11) | (1,745) |  | (16) | — |
Accumulated other comprehensive loss | (23) |  |  | — |  |  | 23 |  | (17) | — |
Total equity attributable to common stock | (2,355) |  |  | 5,346 |  |  | (1,722) |  |  | 1,269 |
Equity attributable to noncontrolling interests | 69 |  |  | — |  |  | 7 |  | (18) | 76 |
Total equity | (2,286) |  |  | 5,346 |  |  | (1,715) |  |  | 1,345 |
TOTAL LIABILITIES AND EQUITY | $ | 4,827 |  |  | $ | 113 |  |  | $ | (1,652) |  |  | $ | 3,288 |
Reorganization Adjustments (1)Net change in cash upon our emergence included the following transactions (in millions):
Proceeds from Revolving Credit Facility | $ | 225 |
Proceeds from Subscription Rights and Backstop Commitment, net | 446 |
Proceeds from Second Lien Term Loan | 200 |
Repayment of debtor-in-possession facilities | (733) |
Payment of legal, professional and other fees | (15) |
Debt issuance costs for the Revolving Credit Facility | (18) |
Debt issuance costs for the Second Lien Term Loan | (2) |
Acquisition of noncontrolling interest as part of the Settlement Agreement | (2) |
Distribution to noncontrolling interest holder | (3) |
Payment of accrued interest and bank fees | (1) |
Net change | $ | 97 |
Our cash balance of $203 million at October 31, 2020 included $158 million of restricted cash, of which $118 million was used to temporarily collateralize letters of credit, $22 million was held for distributions to a JV partner and $18 million was reserved for legal and professional fees related to our Chapter 11 Cases. (2)Represents the write-off of unamortized insurance premiums for our directors and officers policy, which was cancelled as a result of changing the composition of our Board of Directors. (3)Represents the capitalization of debt issuance costs for our Revolving Credit Facility. (4)Represents the payoff of $733 million of debtor-in-possession financing including $83 million of borrowings that were outstanding under our Senior DIP Facility and $650 million of borrowings that were outstanding under our Junior DIP Facility. Refer to Note 2 Chapter 11 Proceedings for more information on our debtor-in-possession credit agreements. (5)Reflects the payment of $15 million for legal, professional and other fees related to our bankruptcy proceedings upon emergence and $1 million for accrued interest and bank fees. (6)Our exit financing at emergence included the following:
| October 31, 2020 |  |  |  |  |  |
| ($ in millions) |  |  |  |  |
Revolving Credit Facility | $ | 225 |  |  |  |  |  |  |
Second Lien Term Loan | 200 |  |  |  |  |  |  |
EHP Notes | 300 |  |  |  |  |  |  |
Long-term debt (principal amount) | $ | 725 |  |  |  |  |  |  |
Debt issuance costs | (2) |  |  |  |  |  |  |
Total long-term debt, net | $ | 723 |  |  |  |  |  |  |
For additional information on our Successor debt, refer to Note 8 Debt. (7)Our liabilities subject to compromise at emergence included the following (in millions):
Long-term debt (principal amount): |  |
2017 Credit Agreement |  | $ | 1,300 |
2016 Credit Agreement |  | 1,000 |
Second Lien Notes |  | 1,808 |
5.5% Senior Notes due 2021 |  | 100 |
6% Senior Notes due 2024 |  | 144 |
Accrued interest |  | 164 |
Total liabilities subject to compromise |  | $ | 4,516 |
(8)Represents the acquisition of the noncontrolling interest in our Ares JV. In accordance with the Settlement Agreement, we exercised a conversion right upon our emergence from bankruptcy, allowing us to acquire all (but not less than all) of the equity interests in the Ares JV held by ECR in exchange for the EHP Notes, Ares Settlement Stock and approximately $2 million in cash. (9)Represents the elimination of Predecessor additional paid-in capital. (10) Represents the fair value of 83.3 million shares of Successor common stock and Warrants issued in accordance with the Plan as follows (in millions):
Par value | $ | 1 |
Additional paid-in capital | 1,253 |
Warrants | 15 |
Total | $ | 1,269 |
(11) Represents the decrease in accumulated deficit resulting from reorganization adjustments and the reclassification from Predecessor additional paid-in capital. Fresh Start Adjustments (12) Represents fair value adjustments to property, plant and equipment (PP&E), including the elimination of Predecessor accumulated depreciation, depletion and amortization. The fair value of our PP&E at emergence consisted of the following:
Proved oil and natural gas properties | $ | 2,409 |
Facilities and other | 273 |
Total PP&E | $ | 2,682 |
(13) Represents an adjustment to our right of use assets as if our lease agreements were new leases on our emergence date. See Note 9 Leases for more information on our leases. (14) Represents a $20 million fair value adjustment to the current portion of asset retirement obligations partially offset by a $5 million decrease in our liability for self-insured medical. Also included are fair value adjustments for our postretirement benefits and a remeasurement of the current portion of our lease liability. (15) Represents a $36 million fair value adjustment related to the long-term portion of asset retirement obligations and $8 million related to environmental and other abandonment obligations. The adjustment also includes $5 million related to remeasuring our long-term lease liability as if our contracts were new leases. (16) Represents the elimination of Predecessor accumulated deficit. (17) Represents the elimination of Predecessor accumulated other comprehensive loss. (18) Represents a fair value adjustment of the noncontrolling interest in the BSP JV based on discounted expected future cash flows.

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