Oklahoma
|
73-1395733
|
|||
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|||
6100 North Western Avenue,
|
Oklahoma City,
|
Oklahoma
|
73118
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|||
|
|
(405)
|
848-8000
|
|
(Registrant’s telephone number, including area code)
|
|
PART I. FINANCIAL INFORMATION
|
Page
|
||
Item 1.
|
|
|||
|
Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019
|
|||
|
for the Three Months Ended March 31, 2020 and 2019
|
|||
|
for the Three Months Ended March 31, 2020 and 2019
|
|||
|
for the Three Months Ended March 31, 2020 and 2019
|
|||
|
for the Three Months Ended March 31, 2020 and 2019
|
|||
|
|
|||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
Item 2.
|
||||
|
||||
|
||||
|
||||
Item 3.
|
||||
Item 4.
|
||||
|
PART II. OTHER INFORMATION
|
|
|
|
Item 1.
|
||||
Item 1A.
|
||||
Item 2.
|
||||
Item 3.
|
||||
Item 4.
|
||||
Item 5.
|
||||
Item 6.
|
||||
ITEM 1.
|
Condensed Consolidated Financial Statements
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
($ in millions)
|
||||||
CURRENT ASSETS:
|
|
|
|
|
||||
Cash and cash equivalents ($2 and $2 attributable to our VIE)
|
|
$
|
82
|
|
|
$
|
6
|
|
Accounts receivable, net
|
|
762
|
|
|
990
|
|
||
Short-term derivative assets
|
|
884
|
|
|
134
|
|
||
Other current assets
|
|
90
|
|
|
121
|
|
||
Total Current Assets
|
|
1,818
|
|
|
1,251
|
|
||
PROPERTY AND EQUIPMENT:
|
|
|
|
|
||||
Oil and natural gas properties, at cost based on successful efforts accounting:
|
|
|
|
|
||||
Proved oil and natural gas properties
($755 and $755 attributable to our VIE)
|
|
31,251
|
|
|
30,765
|
|
||
Unproved properties
|
|
1,870
|
|
|
2,173
|
|
||
Other property and equipment
|
|
1,812
|
|
|
1,810
|
|
||
Total Property and Equipment, at Cost
|
|
34,933
|
|
|
34,748
|
|
||
Less: accumulated depreciation, depletion and amortization
(($748) and ($713) attributable to our VIE)
|
|
(29,110
|
)
|
|
(20,002
|
)
|
||
Property and equipment held for sale, net
|
|
10
|
|
|
10
|
|
||
Total Property and Equipment, Net
|
|
5,833
|
|
|
14,756
|
|
||
LONG-TERM ASSETS:
|
|
|
|
|
||||
Other long-term assets
|
|
157
|
|
|
186
|
|
||
TOTAL ASSETS
|
|
$
|
7,808
|
|
|
$
|
16,193
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
($ in millions)
|
||||||
CURRENT LIABILITIES:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
552
|
|
|
$
|
498
|
|
Current maturities of long-term debt, net
|
|
420
|
|
|
385
|
|
||
Accrued interest
|
|
136
|
|
|
75
|
|
||
Short-term derivative liabilities
|
|
—
|
|
|
2
|
|
||
Other current liabilities ($1 and $1 attributable to our VIE)
|
|
1,152
|
|
|
1,432
|
|
||
Total Current Liabilities
|
|
2,260
|
|
|
2,392
|
|
||
LONG-TERM LIABILITIES:
|
|
|
|
|
||||
Long-term debt, net
|
|
9,163
|
|
|
9,073
|
|
||
Long-term derivative liabilities
|
|
22
|
|
|
2
|
|
||
Asset retirement obligations, net of current portion
|
|
206
|
|
|
200
|
|
||
Other long-term liabilities
|
|
81
|
|
|
125
|
|
||
Total Long-Term Liabilities
|
|
9,472
|
|
|
9,400
|
|
||
|
|
|
|
|||||
EQUITY:
|
|
|
|
|
||||
Chesapeake Stockholders’ Equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value, 20,000,000 shares authorized 5,563,458 shares outstanding
|
|
1,631
|
|
|
1,631
|
|
||
Common stock, $0.01 par value, 22,500,000 and 15,000,000 shares authorized: 9,783,773 and 9,772,793 shares issued(a)
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital(a)
|
|
16,920
|
|
|
16,973
|
|
||
Accumulated deficit
|
|
(22,517
|
)
|
|
(14,220
|
)
|
||
Accumulated other comprehensive income
|
|
21
|
|
|
12
|
|
||
Less: treasury stock, at cost; 0 and 26,224 common shares(a)
|
|
—
|
|
|
(32
|
)
|
||
Total Chesapeake Stockholders’ Equity (Deficit)
|
|
(3,945
|
)
|
|
4,364
|
|
||
Noncontrolling interests
|
|
21
|
|
|
37
|
|
||
Total Equity (Deficit)
|
|
(3,924
|
)
|
|
4,401
|
|
||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
7,808
|
|
|
$
|
16,193
|
|
(a)
|
Amounts and shares have been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
($ in millions except per share data)
|
||||||
REVENUES AND OTHER:
|
|
|
|
|
|
||||
Oil, natural gas and NGL
|
|
|
$
|
1,801
|
|
|
$
|
929
|
|
Marketing
|
|
|
724
|
|
|
1,233
|
|
||
Total Revenues
|
|
|
2,525
|
|
|
2,162
|
|
||
Other
|
|
|
16
|
|
|
15
|
|
||
Gains on sales of assets
|
|
|
—
|
|
|
19
|
|
||
Total Revenues and Other
|
|
|
2,541
|
|
|
2,196
|
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
||||
Oil, natural gas and NGL production
|
|
|
122
|
|
|
115
|
|
||
Oil, natural gas and NGL gathering, processing and transportation
|
|
|
285
|
|
|
274
|
|
||
Severance and ad valorem taxes
|
|
|
54
|
|
|
51
|
|
||
Exploration
|
|
|
282
|
|
|
24
|
|
||
Marketing
|
|
|
746
|
|
|
1,230
|
|
||
General and administrative
|
|
|
65
|
|
|
103
|
|
||
Restructuring and other termination costs
|
|
|
5
|
|
|
—
|
|
||
Provision for legal contingencies, net
|
|
|
1
|
|
|
—
|
|
||
Depreciation, depletion and amortization
|
|
|
603
|
|
|
519
|
|
||
Impairments
|
|
|
8,522
|
|
|
1
|
|
||
Other operating expense
|
|
|
83
|
|
|
61
|
|
||
Total Operating Expenses
|
|
|
10,768
|
|
|
2,378
|
|
||
LOSS FROM OPERATIONS
|
|
|
(8,227
|
)
|
|
(182
|
)
|
||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
||||
Interest expense
|
|
|
(145
|
)
|
|
(161
|
)
|
||
Losses on investments
|
|
|
(23
|
)
|
|
(1
|
)
|
||
Gains on purchases or exchanges of debt
|
|
|
63
|
|
|
—
|
|
||
Other income
|
|
|
6
|
|
|
9
|
|
||
Total Other Expense
|
|
|
(99
|
)
|
|
(153
|
)
|
||
LOSS BEFORE INCOME TAXES
|
|
|
(8,326
|
)
|
|
(335
|
)
|
||
Income tax benefit
|
|
|
(13
|
)
|
|
(314
|
)
|
||
NET LOSS
|
|
|
(8,313
|
)
|
|
(21
|
)
|
||
Net loss attributable to noncontrolling interests
|
|
|
16
|
|
|
—
|
|
||
NET LOSS ATTRIBUTABLE TO CHESAPEAKE
|
|
|
(8,297
|
)
|
|
(21
|
)
|
||
Preferred stock dividends
|
|
|
(22
|
)
|
|
(23
|
)
|
||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
|
|
|
$
|
(8,319
|
)
|
|
$
|
(44
|
)
|
LOSS PER COMMON SHARE:(a)
|
|
|
|
|
|
||||
Basic
|
|
|
$
|
(852.97
|
)
|
|
$
|
(6.37
|
)
|
Diluted
|
|
|
$
|
(852.97
|
)
|
|
$
|
(6.37
|
)
|
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in thousands):(a)
|
|
|
|
|
|
||||
Basic
|
|
|
9,753
|
|
|
6,902
|
|
||
Diluted
|
|
|
9,753
|
|
|
6,902
|
|
(a)
|
All share and per share information has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
NET LOSS
|
|
$
|
(8,313
|
)
|
|
$
|
(21
|
)
|
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX:
|
|
|
|
|
||||
Reclassification of losses on settled derivative instruments(a)
|
|
9
|
|
|
10
|
|
||
Other Comprehensive Income
|
|
9
|
|
|
10
|
|
||
COMPREHENSIVE LOSS
|
|
(8,304
|
)
|
|
(11
|
)
|
||
COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
|
16
|
|
|
—
|
|
||
COMPREHENSIVE LOSS ATTRIBUTABLE TO CHESAPEAKE
|
|
$
|
(8,288
|
)
|
|
$
|
(11
|
)
|
(a)
|
Deferred tax activity incurred in other comprehensive income was offset by a valuation allowance.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
NET LOSS
|
|
$
|
(8,313
|
)
|
|
$
|
(21
|
)
|
ADJUSTMENTS TO RECONCILE NET LOSS TO CASH PROVIDED BY OPERATING ACTIVITIES:
|
|
|
|
|
||||
Depreciation, depletion and amortization
|
|
603
|
|
|
519
|
|
||
Deferred income tax benefit
|
|
(10
|
)
|
|
(314
|
)
|
||
Derivative (gains) losses, net
|
|
(907
|
)
|
|
304
|
|
||
Cash receipts on derivative settlements, net
|
|
89
|
|
|
14
|
|
||
Stock-based compensation
|
|
5
|
|
|
6
|
|
||
Gains on sales of assets
|
|
—
|
|
|
(19
|
)
|
||
Impairments
|
|
8,522
|
|
|
1
|
|
||
Exploration
|
|
279
|
|
|
18
|
|
||
Losses on investments
|
|
23
|
|
|
1
|
|
||
Gains on purchases or exchanges of debt
|
|
(63
|
)
|
|
—
|
|
||
Other
|
|
8
|
|
|
40
|
|
||
Changes in assets and liabilities
|
|
161
|
|
|
(93
|
)
|
||
Net Cash Provided By Operating Activities
|
|
397
|
|
|
456
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Drilling and completion costs
|
|
(501
|
)
|
|
(515
|
)
|
||
Business combination, net
|
|
—
|
|
|
(353
|
)
|
||
Acquisitions of proved and unproved properties
|
|
(6
|
)
|
|
(6
|
)
|
||
Proceeds from divestitures of proved and unproved properties
|
|
7
|
|
|
26
|
|
||
Additions to other property and equipment
|
|
(11
|
)
|
|
(9
|
)
|
||
Proceeds from sales of other property and equipment
|
|
—
|
|
|
1
|
|
||
Net Cash Used In Investing Activities
|
|
(511
|
)
|
|
(856
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Proceeds from revolving credit facility borrowings
|
|
2,331
|
|
|
3,572
|
|
||
Payments on revolving credit facility borrowings
|
|
(2,021
|
)
|
|
(3,136
|
)
|
||
Cash paid to purchase debt
|
|
(93
|
)
|
|
(1
|
)
|
||
Cash paid for preferred stock dividends
|
|
(22
|
)
|
|
(23
|
)
|
||
Other
|
|
(5
|
)
|
|
(8
|
)
|
||
Net Cash Provided By Financing Activities
|
|
190
|
|
|
404
|
|
||
Net increase in cash and cash equivalents
|
|
76
|
|
|
4
|
|
||
Cash and cash equivalents, beginning of period
|
|
6
|
|
|
4
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
82
|
|
|
$
|
8
|
|
|
|
|
|
|
||||
|
Supplemental disclosures to the condensed consolidated statements of cash flows are presented below:
|
||||||||
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
||||
Interest paid, net of capitalized interest
|
|
$
|
113
|
|
|
$
|
145
|
|
Income taxes paid, net of refunds received
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
||||
Common stock issued for business combination
|
|
$
|
—
|
|
|
$
|
2,037
|
|
Change in accrued drilling and completion costs
|
|
$
|
(29
|
)
|
|
$
|
39
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
PREFERRED STOCK:
|
|
|
|
|
||||
Balance, beginning and end of period
|
|
$
|
1,631
|
|
|
$
|
1,671
|
|
COMMON STOCK:(a)
|
|
|
|
|
||||
Balance, beginning of period
|
|
—
|
|
|
—
|
|
||
Common shares issued for WildHorse Merger
|
|
—
|
|
|
—
|
|
||
Balance, end of period
|
|
—
|
|
|
—
|
|
||
ADDITIONAL PAID-IN CAPITAL:(a)
|
|
|
|
|
||||
Balance, beginning of period
|
|
16,973
|
|
|
14,387
|
|
||
Common shares issued for WildHorse Merger
|
|
—
|
|
|
2,037
|
|
||
Stock-based compensation
|
|
(31
|
)
|
|
7
|
|
||
Dividends on preferred stock
|
|
(22
|
)
|
|
(23
|
)
|
||
Balance, end of period
|
|
16,920
|
|
|
16,408
|
|
||
ACCUMULATED DEFICIT:
|
|
|
|
|
||||
Balance, beginning of period
|
|
(14,220
|
)
|
|
(13,912
|
)
|
||
Net loss attributable to Chesapeake
|
|
(8,297
|
)
|
|
(21
|
)
|
||
Balance, end of period
|
|
(22,517
|
)
|
|
(13,933
|
)
|
||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
||||
Balance, beginning of period
|
|
12
|
|
|
(23
|
)
|
||
Hedging activity
|
|
9
|
|
|
10
|
|
||
Balance, end of period
|
|
21
|
|
|
(13
|
)
|
||
TREASURY STOCK – COMMON:(a)
|
|
|
|
|
||||
Balance, beginning of period
|
|
(32
|
)
|
|
(31
|
)
|
||
Purchase of 17,901 and 12,697 shares for company benefit plans
|
|
(2
|
)
|
|
(6
|
)
|
||
Release of 44,126 and 553 shares from company benefit plans
|
|
34
|
|
|
1
|
|
||
Balance, end of period
|
|
—
|
|
|
(36
|
)
|
||
TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
(3,945
|
)
|
|
4,097
|
|
||
NONCONTROLLING INTERESTS:
|
|
|
|
|
||||
Balance, beginning of period
|
|
37
|
|
|
41
|
|
||
Net loss attributable to noncontrolling interests
|
|
(16
|
)
|
|
—
|
|
||
Balance, end of period
|
|
21
|
|
|
41
|
|
||
TOTAL EQUITY (DEFICIT)
|
|
$
|
(3,924
|
)
|
|
$
|
4,138
|
|
(a)
|
Amounts and shares have been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
1.
|
Basis of Presentation and Summary of Significant Accounting Policies
|
2.
|
Going Concern
|
|
|
Three Months Ended
March 31, |
||||
|
|
2020
|
|
2019
|
||
|
|
(in thousands)
|
||||
Common stock equivalent of our preferred stock outstanding(a)
|
|
290
|
|
|
298
|
|
Common stock equivalent of our convertible senior notes outstanding(a)
|
|
621
|
|
|
729
|
|
Participating securities(a)
|
|
4
|
|
|
2
|
|
(a)
|
Amount has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
4.
|
Debt
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
Principal
Amount
|
|
Carrying
Amount |
|
Principal
Amount |
|
Carrying
Amount |
||||||||
|
($ in millions)
|
||||||||||||||
Revolving credit facility
|
$
|
1,900
|
|
|
$
|
1,900
|
|
|
$
|
1,590
|
|
|
$
|
1,590
|
|
Term loan due 2024
|
1,500
|
|
|
1,472
|
|
|
1,500
|
|
|
1,470
|
|
||||
11.5% senior secured second lien notes due 2025
|
2,330
|
|
|
3,205
|
|
|
2,330
|
|
|
3,248
|
|
||||
6.625% senior notes due 2020
|
177
|
|
|
177
|
|
|
208
|
|
|
208
|
|
||||
6.875% senior notes due 2020
|
76
|
|
|
76
|
|
|
93
|
|
|
93
|
|
||||
6.125% senior notes due 2021
|
167
|
|
|
167
|
|
|
167
|
|
|
167
|
|
||||
5.375% senior notes due 2021
|
127
|
|
|
127
|
|
|
127
|
|
|
127
|
|
||||
4.875% senior notes due 2022
|
272
|
|
|
272
|
|
|
338
|
|
|
338
|
|
||||
5.75% senior notes due 2023
|
167
|
|
|
167
|
|
|
209
|
|
|
209
|
|
||||
7.00% senior notes due 2024
|
624
|
|
|
624
|
|
|
624
|
|
|
624
|
|
||||
6.875% senior notes due 2025
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||
8.00% senior notes due 2025
|
246
|
|
|
245
|
|
|
246
|
|
|
245
|
|
||||
5.5% convertible senior notes due 2026(a)(b)
|
1,064
|
|
|
773
|
|
|
1,064
|
|
|
765
|
|
||||
7.5% senior notes due 2026
|
119
|
|
|
119
|
|
|
119
|
|
|
119
|
|
||||
8.00% senior notes due 2026
|
46
|
|
|
44
|
|
|
46
|
|
|
44
|
|
||||
8.00% senior notes due 2027
|
253
|
|
|
253
|
|
|
253
|
|
|
253
|
|
||||
Debt issuance costs
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(44
|
)
|
||||
Total debt, net
|
9,070
|
|
|
9,583
|
|
|
8,916
|
|
|
9,458
|
|
||||
Less current maturities of long-term debt, net(c)
|
(420
|
)
|
|
(420
|
)
|
|
(385
|
)
|
|
(385
|
)
|
||||
Total long-term debt, net
|
$
|
8,650
|
|
|
$
|
9,163
|
|
|
$
|
8,531
|
|
|
$
|
9,073
|
|
(a)
|
We are required to account for the liability and equity components of our convertible debt instrument separately and to reflect interest expense through the first demand repurchase date, as applicable, at the interest rate of similar nonconvertible debt at the time of issuance. The applicable rate for our 5.5% Convertible Senior Notes due 2026 is 11.5%.
|
(b)
|
Prior to maturity under certain circumstances and at the holder’s option, the notes are convertible. During the Current Quarter, the price of our common stock was below the threshold level for conversion and, as a result, the holders do not have the option to convert their notes in the second quarter of 2020.
|
(c)
|
As of March 31, 2020, net current maturities of long-term debt includes our 6.625% Senior Notes due August 2020, our 6.875% Senior Notes due November 2020 and our 6.125% Senior Notes due February 2021. As of December 31, 2019, net current maturities of long-term debt includes our 6.625% Senior Notes due August 2020 and our 6.875% Senior Notes due November 2020.
|
|
|
Notes Repurchased
|
||
|
|
($ in millions)
|
||
6.625% senior notes due 2020
|
|
$
|
31
|
|
6.875% senior notes due 2020
|
|
17
|
|
|
4.875% senior notes due 2022
|
|
66
|
|
|
5.75% senior notes due 2023
|
|
42
|
|
|
Total
|
|
$
|
156
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
($ in millions)
|
|
|
||||||||||
Short-term debt (Level 1)
|
|
$
|
420
|
|
|
$
|
103
|
|
|
$
|
385
|
|
|
$
|
360
|
|
Long-term debt (Level 1)
|
|
$
|
565
|
|
|
$
|
68
|
|
|
$
|
753
|
|
|
$
|
622
|
|
Long-term debt (Level 2)
|
|
$
|
8,598
|
|
|
$
|
3,042
|
|
|
$
|
8,320
|
|
|
$
|
6,085
|
|
5.
|
Contingencies and Commitments
|
|
|
March 31,
2020 |
||
|
|
($ in millions)
|
||
Remainder of 2020
|
|
$
|
815
|
|
2021
|
|
986
|
|
|
2022
|
|
880
|
|
|
2023
|
|
752
|
|
|
2024
|
|
681
|
|
|
2025 – 2034
|
|
3,479
|
|
|
Total
|
|
$
|
7,593
|
|
6.
|
Other Liabilities
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
($ in millions)
|
||||||
Revenues and royalties due others
|
|
$
|
396
|
|
|
$
|
516
|
|
Accrued drilling and production costs
|
|
260
|
|
|
326
|
|
||
Joint interest prepayments received
|
|
57
|
|
|
52
|
|
||
VPP deferred revenue(a)
|
|
50
|
|
|
55
|
|
||
Accrued compensation and benefits(b)
|
|
56
|
|
|
156
|
|
||
Other accrued taxes
|
|
132
|
|
|
150
|
|
||
Other
|
|
201
|
|
|
177
|
|
||
Total other current liabilities
|
|
$
|
1,152
|
|
|
$
|
1,432
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
($ in millions)
|
||||||
VPP deferred revenue(a)
|
|
$
|
—
|
|
|
$
|
9
|
|
Other
|
|
81
|
|
|
116
|
|
||
Total other long-term liabilities
|
|
$
|
81
|
|
|
$
|
125
|
|
(a)
|
At the inception of our volumetric production payment (VPP) agreements, we (i) removed the proved reserves associated with the VPP, (ii) recognized VPP proceeds as deferred revenue which are being amortized on a unit-of-production basis to other revenue over the term of the VPP, (iii) retained responsibility for the production costs and capital costs related to VPP interests and (iv) ceased recognizing production associated with the VPP volumes. The remaining deferred revenue balance will be recognized in other revenues in the consolidated statement of operations through 2021, assuming the related VPP production volumes are delivered as scheduled.
|
(b)
|
In the Current Quarter, we terminated our nonqualified deferred compensation plan. Accordingly, we derecognized the asset associated with the plan after the participants’ investments were liquidated. The cash was distributed to the participants and we extinguished the corresponding $43 million accrued liability.
|
7.
|
Revenue
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||
|
|
Oil
|
|
Natural Gas
|
|
NGL
|
|
Total
|
||||||||
|
|
($ in millions)
|
||||||||||||||
Marcellus
|
|
$
|
—
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
175
|
|
Haynesville
|
|
—
|
|
|
85
|
|
|
—
|
|
|
85
|
|
||||
Eagle Ford
|
|
277
|
|
|
31
|
|
|
20
|
|
|
328
|
|
||||
Brazos Valley
|
|
172
|
|
|
4
|
|
|
4
|
|
|
180
|
|
||||
Powder River Basin
|
|
68
|
|
|
15
|
|
|
7
|
|
|
90
|
|
||||
Mid-Continent
|
|
22
|
|
|
10
|
|
|
4
|
|
|
36
|
|
||||
Revenue from contracts with customers
|
|
539
|
|
|
320
|
|
|
35
|
|
|
894
|
|
||||
Gains on oil, natural gas and NGL derivatives
|
|
839
|
|
|
68
|
|
|
—
|
|
|
907
|
|
||||
Oil, natural gas and NGL revenue
|
|
$
|
1,378
|
|
|
$
|
388
|
|
|
$
|
35
|
|
|
$
|
1,801
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marketing revenue from contracts with customers
|
|
$
|
508
|
|
|
$
|
124
|
|
|
$
|
30
|
|
|
$
|
662
|
|
Other marketing revenue
|
|
61
|
|
|
1
|
|
|
—
|
|
|
62
|
|
||||
Marketing revenue
|
|
$
|
569
|
|
|
$
|
125
|
|
|
$
|
30
|
|
|
$
|
724
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
|
|
Oil
|
|
Natural Gas
|
|
NGL
|
|
Total
|
||||||||
|
|
($ in millions)
|
||||||||||||||
Marcellus
|
|
$
|
—
|
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
302
|
|
Haynesville
|
|
—
|
|
|
201
|
|
|
—
|
|
|
201
|
|
||||
Eagle Ford
|
|
331
|
|
|
48
|
|
|
46
|
|
|
425
|
|
||||
Brazos Valley
|
|
121
|
|
|
4
|
|
|
2
|
|
|
127
|
|
||||
Powder River Basin
|
|
74
|
|
|
25
|
|
|
10
|
|
|
109
|
|
||||
Mid-Continent
|
|
40
|
|
|
15
|
|
|
11
|
|
|
66
|
|
||||
Revenue from contracts with customers
|
|
566
|
|
|
595
|
|
|
69
|
|
|
1,230
|
|
||||
Losses on oil, natural gas and NGL derivatives
|
|
(259
|
)
|
|
(42
|
)
|
|
—
|
|
|
(301
|
)
|
||||
Oil, natural gas and NGL revenue
|
|
$
|
307
|
|
|
$
|
553
|
|
|
$
|
69
|
|
|
$
|
929
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marketing revenue from contracts with customers
|
|
$
|
613
|
|
|
$
|
413
|
|
|
$
|
117
|
|
|
$
|
1,143
|
|
Other marketing revenue
|
|
72
|
|
|
20
|
|
|
—
|
|
|
92
|
|
||||
Losses on marketing derivatives
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Marketing revenue
|
|
$
|
685
|
|
|
$
|
431
|
|
|
$
|
117
|
|
|
$
|
1,233
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
||||
|
|
($ in millions)
|
||||||
Oil, natural gas and NGL sales
|
|
$
|
458
|
|
|
$
|
737
|
|
Joint interest
|
|
178
|
|
|
200
|
|
||
Other
|
|
150
|
|
|
74
|
|
||
Allowance for doubtful accounts
|
|
(24
|
)
|
|
(21
|
)
|
||
Total accounts receivable, net
|
|
$
|
762
|
|
|
$
|
990
|
|
8.
|
Income Taxes
|
9.
|
Equity
|
|
|
Three Months Ended March 31,
|
||||
|
|
2020
|
|
2019
|
||
|
|
(in thousands)
|
||||
Beginning balance(a)
|
|
9,773
|
|
|
4,568
|
|
Common shares issued for WildHorse Merger(a)
|
|
—
|
|
|
3,587
|
|
Restricted stock issuances (net of forfeitures and cancellations)(a)(b)
|
|
11
|
|
|
13
|
|
Ending balance(a)
|
|
9,784
|
|
|
8,168
|
|
(a)
|
All share information has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
(b)
|
10.
|
Share-Based Compensation
|
|
|
Shares of
Unvested
Restricted Stock(a)
|
|
Weighted Average
Grant Date
Fair Value Per Share(a)
|
|||
|
|
(in thousands)
|
|
|
|||
Unvested restricted stock as of January 1, 2020
|
|
52
|
|
|
$
|
710
|
|
Granted
|
|
68
|
|
|
$
|
60
|
|
Vested
|
|
(18
|
)
|
|
$
|
828
|
|
Forfeited
|
|
—
|
|
|
$
|
1,042
|
|
Unvested restricted stock as of March 31, 2020
|
|
102
|
|
|
$
|
256
|
|
(a)
|
All share information has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
|
|
Number of
Shares
Underlying
Options(a)
|
|
Weighted
Average
Exercise Price Per Share(a)
|
|
Weighted
Average
Contract Life in Years
|
|
Aggregate
Intrinsic
Value(b)
|
|||||
|
|
(in thousands)
|
|
|
|
|
|
($ in millions)
|
|||||
Outstanding as of January 1, 2020
|
|
90
|
|
|
$
|
1,420
|
|
|
5.70
|
|
$
|
—
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Expired
|
|
(1
|
)
|
|
$
|
1,090
|
|
|
|
|
|
||
Forfeited
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding as of March 31, 2020
|
|
89
|
|
|
$
|
1,424
|
|
|
5.47
|
|
$
|
—
|
|
Exercisable as of March 31, 2020
|
|
80
|
|
|
$
|
1,510
|
|
|
5.18
|
|
$
|
—
|
|
(a)
|
All share information has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
(b)
|
The intrinsic value of a stock option is the amount by which the current market value or the market value upon exercise of the underlying stock exceeds the exercise price of the option.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
General and administrative expenses
|
|
$
|
4
|
|
|
$
|
6
|
|
Oil and natural gas properties
|
|
1
|
|
|
1
|
|
||
Oil, natural gas and NGL production expenses
|
|
1
|
|
|
1
|
|
||
Total restricted stock and stock option compensation
|
|
$
|
6
|
|
|
$
|
8
|
|
|
|
|
|
Grant Date
Fair Value
|
|
March 31, 2020
|
|||||||||
|
|
Units(a)
|
|
|
Fair Value
|
|
Vested Liability
|
||||||||
|
|
|
|
($ in millions)
|
|
($ in millions)
|
|||||||||
2019 PSU Awards:
|
|
|
|
|
|
|
|
|
|||||||
Payable 2021 and 2022
|
|
15,581
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
—
|
|
2018 PSU Awards:
|
|
|
|
|
|
|
|
|
|||||||
Payable 2021
|
|
5,822
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2017 PSU Awards:
|
|
|
|
|
|
|
|
|
|||||||
Payable 2020
|
|
428
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2018 CRSU Awards:
|
|
|
|
|
|
|
|
|
|||||||
Payable 2021
|
|
19,928
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
—
|
|
(a)
|
All share information has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
General and administrative expenses
|
|
$
|
(3
|
)
|
|
$
|
9
|
|
Oil and natural gas properties
|
|
—
|
|
|
1
|
|
||
Oil, natural gas and NGL production expenses
|
|
(1
|
)
|
|
3
|
|
||
Exploration expenses
|
|
—
|
|
|
1
|
|
||
Total liability-classified awards compensation
|
|
$
|
(4
|
)
|
|
$
|
14
|
|
11.
|
Derivative and Hedging Activities
|
•
|
Swaps: We receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. In exchange for higher fixed prices on certain of our swap trades, we may sell call options and call swaptions.
|
•
|
Options: We sell, and occasionally buy, call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, we pay the counterparty the excess on sold call options and we receive the excess on bought call options. If the market price is lower than the fixed price of the call option, no payment is due from either party.
|
•
|
Call Swaptions: We sell call swaptions to counterparties in exchange for a premium. Swaptions allow the counterparty, on a specific date, to extend an existing fixed-price swap for a certain period of time or to increase the notional volumes of an existing fixed-price swap.
|
•
|
Collars: These instruments contain a fixed floor price (put) and ceiling price (call). If the market price exceeds the call strike price or falls below the put strike price, we receive the fixed price and pay the market price. If the market price is between the put and the call strike prices, no payments are due from either party. Three-way collars include the sale by us of an additional put option in exchange for a more favorable strike price on the call option. This eliminates the counterparty’s downside exposure below the second put option strike price.
|
•
|
Basis Protection Swaps: These instruments are arrangements that guarantee a fixed price differential to NYMEX from a specified delivery point. We receive the fixed price differential and pay the floating market price differential to the counterparty for the hedged commodity.
|
•
|
Put spreads: These instruments contain a fixed floor price (bought put) and sub floor price (sold put). If the market price exceeds the bought put strike, we receive the market price. If the market price is between the bought put and sold put strike prices, we receive the bought put price. If the market price falls below the sub floor, we receive the market price plus the difference between the sold put and bought put.
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||
|
|
Notional Volume
|
|
Fair Value
|
|
Notional Volume
|
|
Fair Value
|
||||||
|
|
|
|
($ in millions)
|
|
|
|
($ in millions)
|
||||||
Oil (mmbbl):
|
|
|
|
|
|
|
|
|
||||||
Fixed-price swaps
|
|
21
|
|
|
$
|
640
|
|
|
24
|
|
|
$
|
(7
|
)
|
Call options (sold)
|
|
9
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||
Collars
|
|
1
|
|
|
48
|
|
|
2
|
|
|
14
|
|
||
Basis protection swaps
|
|
10
|
|
|
38
|
|
|
8
|
|
|
(2
|
)
|
||
Total oil
|
|
41
|
|
|
717
|
|
|
34
|
|
|
5
|
|
||
Natural gas (bcf):
|
|
|
|
|
|
|
|
|
||||||
Fixed-price swaps
|
|
199
|
|
|
152
|
|
|
265
|
|
|
125
|
|
||
Call options
|
|
113
|
|
|
(19
|
)
|
|
22
|
|
|
—
|
|
||
Call swaptions
|
|
29
|
|
|
(4
|
)
|
|
29
|
|
|
(2
|
)
|
||
Put spreads
|
|
94
|
|
|
15
|
|
|
—
|
|
|
—
|
|
||
Basis protection swaps
|
|
46
|
|
|
1
|
|
|
30
|
|
|
2
|
|
||
Total natural gas
|
|
481
|
|
|
145
|
|
|
346
|
|
|
125
|
|
||
Total estimated fair value
|
|
|
|
$
|
862
|
|
|
|
|
$
|
130
|
|
Balance Sheet Classification
|
|
Gross
Fair Value
|
|
Amounts Netted
in the
Consolidated
Balance Sheets
|
|
Net Fair Value
Presented in the
Consolidated
Balance Sheets
|
||||||
|
|
($ in millions)
|
||||||||||
As of March 31, 2020
|
|
|
|
|
|
|
||||||
Commodity Contracts:
|
|
|
|
|
|
|
||||||
Short-term derivative asset
|
|
$
|
889
|
|
|
$
|
(5
|
)
|
|
$
|
884
|
|
Short-term derivative liability
|
|
(5
|
)
|
|
5
|
|
|
—
|
|
|||
Long-term derivative liability
|
|
(22
|
)
|
|
—
|
|
|
(22
|
)
|
|||
Total derivatives
|
|
$
|
862
|
|
|
$
|
—
|
|
|
$
|
862
|
|
|
|
|
|
|
|
|
||||||
As of December 31, 2019
|
|
|
|
|
|
|
||||||
Commodity Contracts:
|
|
|
|
|
|
|
||||||
Short-term derivative asset
|
|
$
|
174
|
|
|
$
|
(40
|
)
|
|
$
|
134
|
|
Short-term derivative liability
|
|
(42
|
)
|
|
40
|
|
|
(2
|
)
|
|||
Long-term derivative liability
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Total derivatives
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Oil, natural gas and NGL revenues
|
|
$
|
894
|
|
|
$
|
1,230
|
|
Gains (losses) on undesignated oil, natural gas and NGL derivatives
|
|
916
|
|
|
(291
|
)
|
||
Losses on terminated cash flow hedges
|
|
(9
|
)
|
|
(10
|
)
|
||
Total oil, natural gas and NGL revenues
|
|
$
|
1,801
|
|
|
$
|
929
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Marketing revenues
|
|
$
|
724
|
|
|
$
|
1,235
|
|
Losses on undesignated marketing natural gas derivatives
|
|
—
|
|
|
(2
|
)
|
||
Total marketing revenues
|
|
$
|
724
|
|
|
$
|
1,233
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||
|
|
Before
Tax |
|
After
Tax |
|
Before
Tax |
|
After
Tax |
||||||||
|
|
($ in millions)
|
||||||||||||||
Balance, beginning of period
|
|
$
|
(45
|
)
|
|
$
|
12
|
|
|
$
|
(80
|
)
|
|
$
|
(23
|
)
|
Losses reclassified to income
|
|
9
|
|
|
9
|
|
|
10
|
|
|
10
|
|
||||
Balance, end of period
|
|
$
|
(36
|
)
|
|
$
|
21
|
|
|
$
|
(70
|
)
|
|
$
|
(13
|
)
|
|
|
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 March 31, 2020
|
|
|
|
|
|
|
|
|
||||||||
Derivative Assets (Liabilities):
|
|
|
|
|
|
|
|
|
||||||||
Commodity assets
|
|
$
|
—
|
|
|
$
|
831
|
|
|
$
|
46
|
|
|
$
|
877
|
|
Commodity liabilities
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||
Total derivatives
|
|
$
|
—
|
|
|
$
|
831
|
|
|
$
|
31
|
|
|
$
|
862
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Derivative Assets (Liabilities):
|
|
|
|
|
|
|
|
|
||||||||
Commodity assets
|
|
$
|
—
|
|
|
$
|
160
|
|
|
$
|
14
|
|
|
$
|
174
|
|
Commodity liabilities
|
|
—
|
|
|
(42
|
)
|
|
(2
|
)
|
|
(44
|
)
|
||||
Total derivatives
|
|
$
|
—
|
|
|
$
|
118
|
|
|
$
|
12
|
|
|
$
|
130
|
|
|
|
Commodity
Derivatives
|
|
Utica Contingent Consideration
|
||||
|
|
($ in millions)
|
||||||
Balance, as of January 1, 2020
|
|
$
|
12
|
|
|
$
|
—
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
||||
Included in earnings(a)
|
|
28
|
|
|
—
|
|
||
Total purchases, issuances, sales and settlements:
|
|
|
|
|
||||
Settlements
|
|
(9
|
)
|
|
—
|
|
||
Balance, as of March 31, 2020
|
|
$
|
31
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Balance, as of January 1, 2019
|
|
$
|
87
|
|
|
$
|
7
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
||||
Included in earnings(a)
|
|
(88
|
)
|
|
—
|
|
||
Total purchases, issuances, sales and settlements:
|
|
|
|
|
||||
Settlements
|
|
4
|
|
|
—
|
|
||
Balance, as of March 31, 2019
|
|
$
|
3
|
|
|
$
|
7
|
|
(a)
|
|
|
Commodity Derivatives
|
||||||
|
|
||||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
($ in millions)
|
||||||
|
Total gains (losses) included in earnings for the period
|
|
$
|
28
|
|
|
$
|
(88
|
)
|
|
Change in unrealized gains (losses) related to assets
still held at reporting date
|
|
$
|
19
|
|
|
$
|
(84
|
)
|
Instrument
Type
|
|
Unobservable
Input
|
|
Range
|
|
Weighted
Average(a)
|
|
Fair Value
March 31, 2020 |
||
|
|
|
|
|
|
|
|
($ in millions)
|
||
Oil trades
|
|
Oil price volatility curves
|
|
26.50% – 242.41%
|
|
42.97%
|
|
$
|
39
|
|
Natural gas trades
|
|
Natural gas price volatility curves
|
|
20.56% – 141.43%
|
|
42.77%
|
|
$
|
(8
|
)
|
(a)
|
Weighted average volatility is weighted by relative volume.
|
12.
|
Exploration Expense
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Impairments of unproved properties
|
|
$
|
272
|
|
|
$
|
18
|
|
Dry hole expense
|
|
7
|
|
|
—
|
|
||
Geological and geophysical expense and other
|
|
3
|
|
|
6
|
|
||
Exploration expense
|
|
$
|
282
|
|
|
$
|
24
|
|
13.
|
Impairments
|
•
|
We calculated the expected undiscounted future net cash flows of our long-lived assets using management’s assumptions and expectations of (i) commodity prices, which are based on the NYMEX strip pricing escalated by an inflationary rate after 2 years, (ii) pricing adjustments for differentials, (iii) operating costs, (iv) capital investment plans, (v) future production volumes, and (vi) estimated proved reserves.
|
•
|
Unprecedented volatility in the price of oil due to the decrease in demand has led us to rely on NYMEX strip pricing, which represents a Level 1 input.
|
•
|
Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) recoverable reserves, (ii) production rates, (iii) future operating and development costs, (iv) future commodity prices escalated by an inflationary rate after two years, adjusted for differentials, and (v) a market-based weighted average cost of capital. We utilized NYMEX strip pricing, adjusted for differentials, to value the reserves. The NYMEX strip pricing inputs used are classified as Level 1 fair value assumptions and all other inputs are classified as Level 3 fair value assumptions.
|
14.
|
Capitalized Exploratory Well Costs
|
|
|
Three Months Ended March 31, 2020
|
||
|
|
($ in millions)
|
||
Balance as of January 1
|
|
$
|
7
|
|
Charges to exploration expense
|
|
(7
|
)
|
|
Balance as of March 31
|
|
$
|
—
|
|
15.
|
Investments
|
16.
|
Other Operating Expense
|
17.
|
Subsequent Events
|
|
|
Oil
|
|
Natural Gas
|
|
NGL
|
|
Total
|
||||
|
|
(mmbbl)
|
|
(bcf)
|
|
(mmbbl)
|
|
(mmboe)
|
||||
March 31, 2020
|
|
|
|
|
|
|
|
|
||||
Proved reserves, beginning of period
|
|
358
|
|
|
6,566
|
|
|
120
|
|
|
1,572
|
|
Extensions, discoveries and other additions
|
|
3
|
|
|
91
|
|
|
1
|
|
|
19
|
|
Revisions of previous estimates
|
|
(136
|
)
|
|
(2,298
|
)
|
|
(40
|
)
|
|
(560
|
)
|
Production
|
|
(12
|
)
|
|
(173
|
)
|
|
(3
|
)
|
|
(43
|
)
|
Proved reserves, end of period
|
|
213
|
|
|
4,186
|
|
|
78
|
|
|
988
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
201
|
|
|
3,377
|
|
|
82
|
|
|
846
|
|
End of period
|
|
198
|
|
|
3,371
|
|
|
73
|
|
|
832
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
157
|
|
|
3,189
|
|
|
38
|
|
|
726
|
|
End of period
|
|
15
|
|
|
815
|
|
|
5
|
|
|
156
|
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Oil Derivatives(a)
|
|||||||
Year
|
|
Type of Derivative Instrument
|
|
Notional Volume
|
|
Average NYMEX Price
|
|
|
|
|
|
(mmbbls)
|
|
|
|
2020
|
|
Swaps
|
|
21
|
|
|
$59.63
|
2020
|
|
Two-way collars
|
|
1
|
|
|
$65.00/$83.25
|
2020
|
|
Basis protection swaps
|
|
10
|
|
|
$2.58
|
2021
|
|
Calls
|
|
5
|
|
|
$61.58
|
2022
|
|
Calls
|
|
4
|
|
|
$61.58
|
Natural Gas Derivatives(a)
|
|||||||
Year
|
|
Type of Derivative Instrument
|
|
Notional Volume
|
|
Average NYMEX Price
|
|
|
|
|
|
(bcf)
|
|
|
|
2020
|
|
Swaps
|
|
199
|
|
|
$2.76
|
2020
|
|
Calls
|
|
17
|
|
|
$12.00
|
2020
|
|
Basis protection swaps
|
|
46
|
|
|
($0.28)
|
2020
|
|
Put spread
|
|
94
|
|
|
$2.06/$1.80
|
2021
|
|
Calls
|
|
96
|
|
|
$2.75
|
2021
|
|
Call swaptions
|
|
14
|
|
|
$2.80
|
2022
|
|
Call swaptions
|
|
15
|
|
|
$2.80
|
(a)
|
Includes amounts settled in April and May 2020.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Cash provided by operating activities
|
|
$
|
397
|
|
|
$
|
456
|
|
Proceeds from divestitures of proved and unproved properties, net
|
|
7
|
|
|
26
|
|
||
Proceeds from revolving credit facility borrowings, net
|
|
310
|
|
|
436
|
|
||
Proceeds from sales of other property and equipment, net
|
|
—
|
|
|
1
|
|
||
Total sources of cash and cash equivalents
|
|
$
|
714
|
|
|
$
|
919
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Oil and Natural Gas Expenditures:
|
|
|
|
|
||||
Drilling and completion costs
|
|
$
|
501
|
|
|
$
|
515
|
|
Acquisitions of proved and unproved properties
|
|
6
|
|
|
6
|
|
||
Total oil and natural gas expenditures
|
|
507
|
|
|
521
|
|
||
Other Uses of Cash and Cash Equivalents:
|
|
|
|
|
||||
Cash paid to purchase debt
|
|
93
|
|
|
1
|
|
||
Business combination, net
|
|
—
|
|
|
353
|
|
||
Additions to other property and equipment
|
|
11
|
|
|
9
|
|
||
Dividends paid
|
|
22
|
|
|
23
|
|
||
Other
|
|
5
|
|
|
8
|
|
||
Total other uses of cash and cash equivalents
|
|
131
|
|
|
394
|
|
||
Total uses of cash and cash equivalents
|
|
$
|
638
|
|
|
$
|
915
|
|
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||||||
|
|
Oil
|
|
Natural Gas
|
|
NGL
|
|
Total
|
|||||||||||||||||||
|
|
mbbl
per day
|
|
$/bbl
|
|
mmcf
per day
|
|
$/mcf
|
|
mbbl
per day
|
|
$/bbl
|
|
mboe
per day
|
|
%
|
|
$/boe
|
|||||||||
Marcellus
|
|
—
|
|
|
—
|
|
|
976
|
|
|
1.97
|
|
|
—
|
|
|
—
|
|
|
163
|
|
|
34
|
|
|
11.85
|
|
Haynesville
|
|
—
|
|
|
—
|
|
|
556
|
|
|
1.68
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|
19
|
|
|
10.10
|
|
Eagle Ford
|
|
63
|
|
|
48.53
|
|
|
159
|
|
|
2.18
|
|
|
19
|
|
|
11.71
|
|
|
108
|
|
|
23
|
|
|
33.38
|
|
Brazos Valley
|
|
41
|
|
|
46.30
|
|
|
69
|
|
|
0.60
|
|
|
9
|
|
|
5.26
|
|
|
61
|
|
|
13
|
|
|
32.55
|
|
Powder River Basin
|
|
17
|
|
|
43.23
|
|
|
89
|
|
|
1.84
|
|
|
6
|
|
|
13.30
|
|
|
38
|
|
|
8
|
|
|
26.01
|
|
Mid-Continent
|
|
5
|
|
|
44.75
|
|
|
49
|
|
|
2.24
|
|
|
3
|
|
|
14.06
|
|
|
16
|
|
|
3
|
|
|
23.38
|
|
Retained assets(a)
|
|
126
|
|
|
46.93
|
|
|
1,898
|
|
|
1.86
|
|
|
37
|
|
|
10.71
|
|
|
479
|
|
|
100
|
|
|
20.53
|
|
Divested assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
126
|
|
|
46.93
|
|
|
1,898
|
|
|
1.86
|
|
|
37
|
|
|
10.71
|
|
|
479
|
|
|
100
|
%
|
|
20.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||||||||
|
|
Oil
|
|
Natural Gas
|
|
NGL
|
|
Total
|
|||||||||||||||||||
|
|
mbbl
per day
|
|
$/bbl
|
|
mmcf
per day
|
|
$/mcf
|
|
mbbl
per day
|
|
$/bbl
|
|
mboe
per day
|
|
%
|
|
$/boe
|
|||||||||
Marcellus
|
|
—
|
|
|
—
|
|
|
948
|
|
|
3.54
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
33
|
|
|
21.23
|
|
Haynesville
|
|
—
|
|
|
—
|
|
|
759
|
|
|
2.94
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
26
|
|
|
17.63
|
|
Eagle Ford
|
|
61
|
|
|
59.78
|
|
|
148
|
|
|
3.58
|
|
|
24
|
|
|
21.70
|
|
|
109
|
|
|
23
|
|
|
43.01
|
|
Brazos Valley(b)
|
|
23
|
|
|
59.32
|
|
|
23
|
|
|
2.04
|
|
|
3
|
|
|
8.25
|
|
|
30
|
|
|
6
|
|
|
47.55
|
|
Powder River Basin
|
|
16
|
|
|
50.93
|
|
|
82
|
|
|
3.38
|
|
|
6
|
|
|
18.57
|
|
|
36
|
|
|
7
|
|
|
33.70
|
|
Mid-Continent
|
|
8
|
|
|
52.93
|
|
|
58
|
|
|
2.82
|
|
|
6
|
|
|
21.64
|
|
|
23
|
|
|
5
|
|
|
30.77
|
|
Retained assets(a)
|
|
108
|
|
|
57.85
|
|
|
2,018
|
|
|
3.27
|
|
|
39
|
|
|
20.03
|
|
|
482
|
|
|
100
|
|
|
28.23
|
|
Divested assets
|
|
1
|
|
|
48.05
|
|
|
5
|
|
|
2.48
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
25.59
|
|
Total
|
|
109
|
|
|
57.80
|
|
|
2,023
|
|
|
3.27
|
|
|
39
|
|
|
20.03
|
|
|
484
|
|
|
100
|
%
|
|
28.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes assets retained as of March 31, 2020.
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions)
|
|||||||||
Oil
|
|
$
|
539
|
|
|
$
|
566
|
|
|
(5
|
)%
|
Natural gas
|
|
320
|
|
|
595
|
|
|
(46
|
)%
|
||
NGL
|
|
35
|
|
|
69
|
|
|
(49
|
)%
|
||
Oil, natural gas and NGL sales
|
|
$
|
894
|
|
|
$
|
1,230
|
|
|
(27
|
)%
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Oil derivatives – realized gains (losses)
|
|
$
|
127
|
|
|
$
|
10
|
|
Oil derivatives – unrealized gains (losses)
|
|
712
|
|
|
(269
|
)
|
||
Total gains (losses) on oil derivatives
|
|
839
|
|
|
(259
|
)
|
||
|
|
|
|
|
||||
Natural gas derivatives – realized gains (losses)
|
|
51
|
|
|
(36
|
)
|
||
Natural gas derivatives – unrealized gains (losses)
|
|
17
|
|
|
(6
|
)
|
||
Total gains (losses) on natural gas derivatives
|
|
68
|
|
|
(42
|
)
|
||
Total gains (losses) on oil and natural gas derivatives
|
|
$
|
907
|
|
|
$
|
(301
|
)
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions)
|
|||||||||
Marketing revenues
|
|
$
|
724
|
|
|
$
|
1,233
|
|
|
(41
|
)%
|
Marketing expenses
|
|
746
|
|
|
1,230
|
|
|
(39
|
)%
|
||
Marketing margin
|
|
$
|
(22
|
)
|
|
$
|
3
|
|
|
833
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions)
|
|||||||||
Other revenue
|
|
$
|
16
|
|
|
$
|
15
|
|
|
7
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions, except per unit)
|
|||||||||
Marcellus
|
|
$
|
9
|
|
|
$
|
9
|
|
|
—
|
%
|
Haynesville
|
|
11
|
|
|
14
|
|
|
(21
|
)%
|
||
Eagle Ford
|
|
36
|
|
|
41
|
|
|
(12
|
)%
|
||
Brazos Valley
|
|
27
|
|
|
14
|
|
|
93
|
%
|
||
Powder River Basin
|
|
18
|
|
|
14
|
|
|
29
|
%
|
||
Mid-Continent
|
|
21
|
|
|
25
|
|
|
(16
|
)%
|
||
Retained Assets(a)
|
|
122
|
|
|
117
|
|
|
4
|
%
|
||
Divested Assets
|
|
—
|
|
|
(2
|
)
|
|
(100
|
)%
|
||
Total oil, natural gas and NGL production expenses
|
|
$
|
122
|
|
|
$
|
115
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|||||
|
|
|
|||||||||
Marcellus
|
|
$
|
0.58
|
|
|
$
|
0.63
|
|
|
(8
|
)%
|
Haynesville
|
|
$
|
1.30
|
|
|
$
|
1.22
|
|
|
7
|
%
|
Eagle Ford
|
|
$
|
3.62
|
|
|
$
|
4.15
|
|
|
(13
|
)%
|
Brazos Valley
|
|
$
|
4.98
|
|
|
$
|
5.36
|
|
|
(7
|
)%
|
Powder River Basin
|
|
$
|
5.28
|
|
|
$
|
4.36
|
|
|
21
|
%
|
Mid-Continent
|
|
$
|
13.95
|
|
|
$
|
11.79
|
|
|
18
|
%
|
Retained Assets(a)
|
|
$
|
2.80
|
|
|
$
|
2.69
|
|
|
4
|
%
|
Divested Assets
|
|
$
|
—
|
|
|
$
|
(10.24
|
)
|
|
(100
|
)%
|
Total oil, natural gas and NGL production expenses per boe
|
|
$
|
2.80
|
|
|
$
|
2.64
|
|
|
6
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions, except per unit)
|
|||||||||
Oil, natural gas and NGL gathering, processing and transportation expenses
|
|
$
|
285
|
|
|
$
|
274
|
|
|
4
|
%
|
Oil ($ per bbl)
|
|
$
|
3.40
|
|
|
$
|
3.47
|
|
|
(2
|
)%
|
Natural gas ($ per mcf)
|
|
$
|
1.32
|
|
|
$
|
1.21
|
|
|
9
|
%
|
NGL ($ per bbl)
|
|
$
|
5.70
|
|
|
$
|
5.57
|
|
|
2
|
%
|
Total ($ per boe)
|
|
$
|
6.55
|
|
|
$
|
6.29
|
|
|
4
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions, except per unit)
|
|||||||||
Severance taxes
|
|
$
|
31
|
|
|
$
|
34
|
|
|
(9
|
)%
|
Ad valorem taxes
|
|
23
|
|
|
17
|
|
|
35
|
%
|
||
Severance and ad valorem taxes
|
|
$
|
54
|
|
|
$
|
51
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|||||
Severance taxes per boe
|
|
$
|
0.71
|
|
|
$
|
0.78
|
|
|
(9
|
)%
|
Ad valorem taxes per boe
|
|
0.53
|
|
|
0.37
|
|
|
43
|
%
|
||
Severance and ad valorem taxes per boe
|
|
$
|
1.24
|
|
|
$
|
1.15
|
|
|
8
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions)
|
|||||||||
Impairments of unproved properties
|
|
$
|
272
|
|
|
$
|
18
|
|
|
1,411
|
%
|
Dry hole expense
|
|
7
|
|
|
—
|
|
|
n/a
|
|
||
Geological and geophysical expense and other
|
|
3
|
|
|
6
|
|
|
(50
|
)%
|
||
Exploration expense
|
|
$
|
282
|
|
|
$
|
24
|
|
|
1,075
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions, except per unit)
|
|||||||||
Gross compensation and overhead
|
|
$
|
161
|
|
|
$
|
195
|
|
|
(17
|
)%
|
Allocated to production expenses
|
|
(30
|
)
|
|
(35
|
)
|
|
(14
|
)%
|
||
Allocated to marketing expenses
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
%
|
||
Allocated to exploration expenses
|
|
—
|
|
|
(4
|
)
|
|
(100
|
)%
|
||
Allocated to sand mine expenses
|
|
(2
|
)
|
|
—
|
|
|
n/a
|
|
||
Capitalized general and administrative expenses
|
|
(21
|
)
|
|
(13
|
)
|
|
62
|
%
|
||
Reimbursed from third parties
|
|
(39
|
)
|
|
(36
|
)
|
|
8
|
%
|
||
General and administrative expenses, net
|
|
$
|
65
|
|
|
$
|
103
|
|
|
(37
|
)%
|
|
|
|
|
|
|
|
|||||
General and administrative expenses, net per boe
|
|
$
|
1.50
|
|
|
$
|
2.34
|
|
|
(36
|
)%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
|
|
($ in millions, except per unit)
|
|||||||||
Depreciation, depletion and amortization
|
|
$
|
603
|
|
|
$
|
519
|
|
|
16
|
%
|
Depreciation, depletion and amortization per boe
|
|
$
|
13.83
|
|
|
$
|
11.90
|
|
|
16
|
%
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Impairments of proved oil and natural gas properties
|
|
$
|
8,446
|
|
|
$
|
—
|
|
Impairments of other fixed assets and other
|
|
76
|
|
|
1
|
|
||
Total impairments
|
|
$
|
8,522
|
|
|
$
|
1
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions)
|
||||||
Other operating expense
|
|
$
|
83
|
|
|
$
|
61
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
($ in millions,
except per unit)
|
||||||
Interest expense on senior notes
|
|
$
|
129
|
|
|
$
|
144
|
|
Interest expense on term loan
|
|
38
|
|
|
—
|
|
||
Amortization of discount, issuance costs and other
|
|
7
|
|
|
6
|
|
||
Amortization of premium
|
|
(44
|
)
|
|
—
|
|
||
Interest expense on revolving credit facility
|
|
22
|
|
|
17
|
|
||
Realized gains on interest rate derivatives
|
|
—
|
|
|
(1
|
)
|
||
Unrealized losses on interest rate derivatives
|
|
—
|
|
|
1
|
|
||
Capitalized interest
|
|
(7
|
)
|
|
(6
|
)
|
||
Total interest expense
|
|
$
|
145
|
|
|
$
|
161
|
|
|
|
|
|
|
||||
Interest expense per boe
|
|
$
|
3.34
|
|
|
$
|
3.72
|
|
|
|
|
|
|
||||
Average senior notes borrowings
|
|
$
|
5,783
|
|
|
$
|
8,207
|
|
Average credit facilities borrowings
|
|
$
|
1,648
|
|
|
$
|
1,021
|
|
Average term loan borrowings
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
|
Obligors
|
||||||
|
|
March 31, 2020
|
|
December 31, 2020
|
||||
|
|
($ in millions)
|
||||||
Current assets
|
|
$
|
1,761
|
|
|
$
|
1,158
|
|
Total property and equipment, net
|
|
$
|
4,671
|
|
|
$
|
10,480
|
|
Long-term assets
|
|
$
|
144
|
|
|
$
|
166
|
|
Current liabilities
|
|
$
|
2,085
|
|
|
$
|
2,231
|
|
Long-term liabilities
|
|
$
|
9,453
|
|
|
$
|
9,380
|
|
|
|
Obligors
|
||
|
|
Three Months Ended
March 31, 2020
|
||
|
|
$ in millions
|
||
REVENUES:
|
|
|
||
Oil, natural gas and NGL
|
|
$
|
1,619
|
|
Marketing
|
|
724
|
|
|
Total Revenues
|
|
2,343
|
|
|
Other
|
|
14
|
|
|
Total Revenues and Other
|
|
2,357
|
|
|
OPERATING EXPENSES:
|
|
|
||
Oil, natural gas and NGL production
|
|
95
|
|
|
Oil, natural gas and NGL gathering, processing and transportation
|
|
275
|
|
|
Production taxes
|
|
38
|
|
|
Exploration
|
|
120
|
|
|
Marketing
|
|
745
|
|
|
General and administrative
|
|
65
|
|
|
Restructuring and other termination costs
|
|
5
|
|
|
Provision for legal contingencies, net
|
|
1
|
|
|
Depreciation, depletion and amortization
|
|
430
|
|
|
Impairments
|
|
5,589
|
|
|
Other operating expense
|
|
82
|
|
|
Total Operating Expenses
|
|
7,445
|
|
|
LOSS FROM OPERATIONS
|
|
(5,088
|
)
|
|
OTHER INCOME (EXPENSE):
|
|
|
||
Interest expense
|
|
(148
|
)
|
|
Losses on investments
|
|
(23
|
)
|
|
Gains on purchases or exchanges of debt
|
|
63
|
|
|
Other income
|
|
6
|
|
|
Total Other Expense
|
|
(102
|
)
|
|
LOSS BEFORE INCOME TAXES
|
|
(5,190
|
)
|
|
INCOME TAX BENEFIT
|
|
(13
|
)
|
|
NET LOSS
|
|
(5,177
|
)
|
|
Net loss attributable to noncontrolling interests
|
|
—
|
|
|
NET LOSS ATTRIBUTABLE TO CHESAPEAKE
|
|
(5,177
|
)
|
|
Other comprehensive income
|
|
9
|
|
|
COMPREHENSIVE LOSS ATTRIBUTABLE TO CHESAPEAKE
|
|
$
|
(5,168
|
)
|
•
|
the impact of the COVID-19 pandemic and its effect on our business, financial condition, employees, contractors, vendors and the global demand for oil and natural gas and U.S. and world financial markets;
|
•
|
our ability to comply with the covenants under our revolving credit facility and other indebtedness and the related impact on our ability to continue as a going concern;
|
•
|
the impact of any strategic alternatives;
|
•
|
the volatility of oil, natural gas and NGL prices, which are affected by general economic and business conditions, as well as increased demand for (and availability of) alternative fuels and electric vehicles;
|
•
|
uncertainties inherent in estimating quantities of oil, natural gas and NGL reserves and projecting future rates of production and the amount and timing of development expenditures;
|
•
|
our ability to replace reserves and sustain production;
|
•
|
drilling and operating risks and resulting liabilities;
|
•
|
our ability to generate profits or achieve targeted results in drilling and well operations;
|
•
|
the limitations our level of indebtedness may have on our financial flexibility;
|
•
|
our inability to access the capital markets on favorable terms;
|
•
|
the availability of cash flows from operations and other funds to finance reserve replacement costs or satisfy our debt obligations;
|
•
|
adverse developments or losses from pending or future litigation and regulatory proceedings, including royalty claims;
|
•
|
legislative and regulatory initiatives addressing environmental concerns, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring or water disposal;
|
•
|
terrorist activities and/or cyber-attacks adversely impacting our operations;
|
•
|
effects of acquisitions and dispositions, including our acquisition of WildHorse and our ability to realize related synergies and cost savings;
|
•
|
effects of purchase price adjustments and indemnity obligations; and
|
•
|
other factors that are described under Risk Factors in Item 1A of our 2019 Form 10-K and this Form 10-Q.
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Years of Maturity
|
|
|
||||||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt – fixed rate
|
$
|
253
|
|
|
$
|
294
|
|
|
$
|
272
|
|
|
$
|
167
|
|
|
$
|
624
|
|
|
$
|
4,060
|
|
|
$
|
5,670
|
|
Average interest rate
|
6.70
|
%
|
|
5.80
|
%
|
|
4.88
|
%
|
|
5.75
|
%
|
|
7.00
|
%
|
|
9.34
|
%
|
|
7.58
|
%
|
|||||||
Debt – variable rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,900
|
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
$
|
3,400
|
|
Average interest rate
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.81
|
%
|
|
9.00
|
%
|
|
—
|
%
|
|
6.10
|
%
|
ITEM 4.
|
Controls and Procedures
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
•
|
limit our ability to plan for, or react to, market conditions, to meet capital needs or otherwise to restrict our activities or business plan; and
|
•
|
adversely affect our ability to finance our operations, enter into acquisitions or divestitures to engage in other business activities that would be in our interest.
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total
Number
of Shares
Purchased(a)
|
|
Average
Price
Paid
Per
Share(a) |
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
|
|
Maximum
Approximate
Dollar Value
of Shares
That May Yet
Be Purchased
Under
the Plans
or Programs
|
||||||
|
|
|
|
|
|
|
|
($ in millions)
|
||||||
January 1, 2020 through January 31, 2020
|
|
131
|
|
|
$
|
158.00
|
|
|
—
|
|
|
$
|
—
|
|
February 1, 2020 through February 29, 2020
|
|
17,770
|
|
|
$
|
90.00
|
|
|
—
|
|
|
$
|
—
|
|
March 1, 2020 through March 31, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
17,901
|
|
|
$
|
90.50
|
|
|
—
|
|
|
|
(a)
|
Includes shares of common stock purchased on behalf of our deferred compensation plan, which we terminated in January 2020 in accordance with its terms. All share information has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 6 and Note 17 for additional information.
|
ITEM 3.
|
Defaults Upon Senior Securities
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Other Information
|
ITEM 6.
|
Exhibits
|
|
CHESAPEAKE ENERGY CORPORATION
|
||
|
|
|
|
Date: May 11, 2020
|
By:
|
|
/s/ ROBERT D. LAWLER
|
|
|
|
Robert D. Lawler
President and Chief Executive Officer |
|
|
|
|
Date: May 11, 2020
|
By:
|
|
/s/ DOMENIC J. DELL’OSSO, JR.
|
|
|
|
Domenic J. Dell’Osso, Jr.
Executive Vice President and Chief Financial Officer |
Subsidiary
|
Jurisdiction of Formation
|
Registered Security
|
Guarantor Status
|
Chesapeake AEZ Exploration, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Appalachia, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake-Clements Acquisition, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake E&P Holding, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Energy Louisiana, LLC
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Energy Marketing, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Exploration, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Land Development Company, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Louisiana, L.P.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Midstream Development, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake NG Ventures Corporation
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Operating, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Plains, LLC
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake Royalty, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Chesapeake VRT, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
CHK Energy Holdings, Inc.
|
Texas
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
CHK Utica, L.L.C.
|
Delaware
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Compass Manufacturing, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
EMLP, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Empress, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Empress Louisiana Properties, L.P.
|
Texas
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
GSF, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
MC Louisiana Minerals, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
MC Mineral Company, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Midcon Compression, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Nomac Services, L.L.C.
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Northern Michigan Exploration Company, L.L.C.
|
Michigan
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Sparks Drive SWD, Inc.
|
Delaware
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
Winter Moon Energy Corporation
|
Oklahoma
|
Senior Notes
|
Joint and Several, Fully and Unconditionally
|
|
|
Exhibit 31.1
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Chesapeake Energy Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
May 11, 2020
|
By:
|
/s/ ROBERT D. LAWLER
|
|
|
Robert D. Lawler
|
|
|
President and Chief Executive Officer
|
|
|
Exhibit 31.2
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Chesapeake Energy Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
May 11, 2020
|
By:
|
/s/ DOMENIC J. DELL’OSSO, JR.
|
|
|
Domenic J. Dell’Osso, Jr.
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Exhibit 32.1
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
May 11, 2020
|
By:
|
/s/ ROBERT D. LAWLER
|
|
|
Robert D. Lawler
President and Chief Executive Officer
|
|
|
Exhibit 32.2
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
May 11, 2020
|
By:
|
/s/ DOMENIC J. DELL’OSSO, JR.
|
|
|
Domenic J. Dell’Osso, Jr.
|
|
|
Executive Vice President and
Chief Financial Officer
|