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DERIVATIVES | 12 Months Ended
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Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES | DERIVATIVES We continue to maintain a commodity hedging program primarily focused on crude oil to help protect our cash flows, margins and capital program from the volatility of commodity prices. Our Revolving Credit Facility and Second Lien Term Loan require that we hedge a significant amount of crude oil production as described in Note 8 Debt. We have met our hedging obligation under our Revolving Credit Facility and Second Lien Term Loan. Commodity-Price Risk We did not have any commodity derivatives designated as accounting hedges as of and during the years ended December 31, 2020, 2019 and 2018. As part of our hedging program, we held the following Brent-based crude oil contracts as of December 31, 2020:
| Q1 2021 |  | Q2 2021 |  | Q3 2021 |  | Q4 2021 |  | 2022 |  | January - October 2023 |  |
Sold Calls: |  |  |  |  |  |  |  |  |  |  |  |  |
Barrels per day | 19,028 |  |  | 33,372 |  |  | 35,202 |  |  | 10,645 |  |  | 30,783 |  |  | 17,758 |  |  |
Weighted-average price per barrel | $ | 47.88 |  |  | $ | 48.64 |  |  | $ | 49.83 |  |  | $ | 56.00 |  |  | $ | 59.37 |  |  | $ | 58.01 |  |  |
Purchased Puts |  |  |  |  |  |  |  |  |  |  |  |  |
Barrels per day | 39,148 |  |  | 37,872 |  |  | 36,617 |  |  | 35,483 |  |  | 30,783 |  |  | 17,758 |  |  |
Weighted-average price per barrel | $ | 41.88 |  |  | $ | 40.00 |  |  | $ | 40.00 |  |  | $ | 40.00 |  |  | $ | 40.00 |  |  | $ | 40.00 |  |  |
Sold Puts |  |  |  |  |  |  |  |  |  |  |  |  |
Barrels per day | 15,659 |  |  | 15,149 |  |  | 14,647 |  |  | 14,193 |  |  | 3,042 |  |  | — |  |  |
Weighted-average price per barrel | $ | 35.97 |  |  | $ | 31.41 |  |  | $ | 30.00 |  |  | $ | 32.00 |  |  | $ | 32.00 |  |  | $ | — |  |  |
Swaps |  |  |  |  |  |  |  |  |  |  |  |  |
Barrels per day | 7,830 |  |  | 7,574 |  |  | 7,323 |  |  | 7,097 |  |  | 6,576 |  |  | 5,919 |  |  |
Weighted-average price per barrel | $ | 43.74 |  |  | $ | 44.13 |  |  | $ | 43.82 |  |  | $ | 45.30 |  |  | $ | 46.29 |  |  | $ | 47.57 |  |  |
The BSP JV holds crude oil derivatives and natural gas swaps for insignificant volumes through 2021 that are included in our consolidated results. The hedges entered into by the BSP JV could affect the timing of the redemption of BSP's preferred interest. The outcomes of the derivative positions are as follows: •Sold call options – we make settlement payments for prices above the indicated weighted-average price per barrel. •Purchased put options – we receive settlement payments for prices below the indicated weighted-average price per barrel. •Sold put options – we make settlement payments for prices below the indicated weighted-average price per barrel. •Swaps – we make settlement payments for prices above the indicated weighted-average price per barrel and receive settlement payments for prices below the indicated weighted-average price per barrel. From time to time, we may use combinations of these positions to increase the efficacy of our hedging program. We mark our derivative contracts to market at the end of each reporting period. These noncash derivative gains and losses, along with settlement payments, are reported in net derivative (loss) gain from commodity contracts on our consolidated statements of operations as shown in the table below:
| Successor |  |  | Predecessor
| November 1, 2020 - December 31, 2020 |  |  | January 1, 2020 - October 31, 2020 |  | Year ended December 31, 2019 |  | Year ended December 31, 2018
(in millions) |  |  |  |  |  |  |  |
Non-cash derivative (loss) gain | $ | (140) |  |  |  | $ | (17) |  |  | $ | (170) |  |  | $ | 229 |
Net (payments) proceeds on settled commodity derivatives | (1) |  |  |  | 108 |  |  | 111 |  |  | (228) |
Net derivative (loss) gain from commodity contracts | $ | (141) |  |  |  | $ | 91 |  |  | $ | (59) |  |  | $ | 1 |
Interest-Rate Risk In May 2018, we entered into derivative contracts that limit our interest rate exposure with respect to $1.3 billion of our variable-rate indebtedness. These interest-rate contracts reset monthly and require the counterparties to pay any excess interest owed on such amount in the event the one-month LIBOR exceeds 2.75% for any monthly period prior to May 4, 2021. For the Successor and Predecessor periods in 2020, we did not report gains or losses on these contracts. For the year ended December 31, 2019, we reported a loss on these contracts, included in other non-operating expenses on our consolidated statement of operations, of $4 million. No payments from these contracts were received in either 2020 or 2019. Fair Value of Derivatives Our derivative contracts are measured at fair value using industry-standard models with various inputs, including quoted forward prices, and are classified as Level 2 in the required fair value hierarchy for the periods presented. Commodity Contracts The following tables present the fair values (at gross and net) of our outstanding derivatives:
December 31, 2020 (Successor)
Classification |  | Gross Amounts at Fair Value |  | Netting |  | Net Fair Value
Assets: |  | (in millions)
Other current assets |  | $ | 21 |  |  | $ | (21) |  |  | $ | — |
Other assets |  | 63 |  |  | (63) |  |  | — |
Liabilities: |  |  |  |  |  |
Accrued liabilities |  | (71) |  |  | 21 |  |  | (50) |
Other long-term liabilities |  | (69) |  |  | 63 |  |  | (6) |
|  | $ | (56) |  |  | $ | — |  |  | $ | (56) |
December 31, 2019 (Predecessor)
Classification |  | Gross Amounts at Fair Value |  | Netting |  | Net Fair Value
Assets: |  | (in millions)
Other current assets |  | $ | 49 |  |  | $ | (10) |  |  | $ | 39 |
Other assets |  | 1 |  |  | — |  |  | 1 |
Liabilities: |  |  |  |  |  |
Accrued liabilities |  | (15) |  |  | 10 |  |  | (5) |
Other long-term liabilities |  | — |  |  | — |  |  | — |
|  | $ | 35 |  |  | $ | — |  |  | $ | 35 |
Interest-Rate Contracts The fair value of our interest-rate derivatives contracts was not significant for all periods presented. Counterparty Credit Risk As of December 31, 2020, all of our derivative financial instruments were with investment-grade counterparties. We believe exposure to credit-related losses at December 31, 2020 was not material and losses associated with credit risk have been insignificant for all years presented. All of our derivative instruments are covered by International Swap Dealers Association Master Agreements with counterparties. At December 31, 2020, and 2019, we had insignificant collateral posted.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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